KUALA LUMPUR (Aug 10): Malaysia technology stocks resumed ascent on Monday and hit a fresh two-year high as investors piled into semiconductor companies as well as digital services firms.
The Bursa Malaysia Technology Index rose 2.5% and closed at its highest since July 2024, outperforming the benchmark FBM KLCI that was marginally lower. Dagang NeXchange Bhd (KL:DNEX) was the bourse’s most active stock, up 6.4% to 50 sen, after more than 150 million shares exchanged hands.
Among semiconductor stocks, Inari Amertron Bhd (KL:INARI) climbed 5% to RM2.52 while SkyeChip Bhd (KL:SKYECHIP) was nearly 8% higher at RM3.25.
The gains came against a backdrop of expectations for easier US monetary policy and advances in chip-related stocks on Japan's Nikkei.
Research analysts also pointed to developments in the artificial intelligence (AI) semiconductor supply chain as factors that could influence gains for Malaysian technology stocks.
In a research note on Monday, BIMB Securities said the AI investment cycle is expanding beyond computing power into areas including high-speed optical connectivity, AI accelerators, advanced packaging and semiconductor infrastructure.
Following its tour of Penang, the research house said the local semiconductor ecosystem is gaining traction across these segments, while companies are gradually moving into higher-value activities such as integrated circuit (IC) design, photonics, advanced packaging, semiconductor materials and equipment.
“Among our key takeaways, we are increasingly optimistic on the emerging photonics and optical connectivity ecosystem in Malaysia,” said BIMB Securities.
BIMB Securities said supply-chain diversification, driven by geopolitical fragmentation and China's push for semiconductor self-sufficiency, could also support Malaysia's position under the China+1 strategy.
Within the semiconductor design space, BIMB Securities said SkyeChip is supporting HBM4E-related development and working on HBM5 intellectual property (IP), while expanding its silicon IP capabilities towards 3nm and eventually 2nm process nodes. The company is also developing automotive semiconductor IPs, with initial revenue contributions targeted for the first half of calendar year 2027.
Despite the potential growth areas, BIMB Securities retained its ‘sell’ recommendation on SkyeChip and raised its target price to RM2.17 from RM1.18, citing a higher valuation benchmark and a 13.6% upward revision of its earnings forecast to RM85.4 million for the financial year ending March 31, 2028 (FY2028).
The research house nevertheless said the stock's valuation already reflected much of the anticipated growth from its HBM and ASIC businesses.
In a separate note last Friday, Public Investment Bank said a proposed US restriction on new-model optical transceivers manufactured in China could encourage further diversification of the optical supply chain towards Malaysia.
“For Malaysian and Asean semiconductor manufacturers, this could translate into greater opportunities in advanced photonics, optical assembly, testing, and packaging as multinational companies diversify production away from China,” said Public Investment.
Optical transceivers are used in AI data centres to facilitate high-speed communication between graphics processing units (GPUs), switches and servers. The research house said rising AI infrastructure investment is driving demand for higher-speed modules, including 800G and emerging 1.6T products.