PETALING JAYA: The strengthening ringgit against the US dollar is expected to weigh on the earnings of certain Malaysian semiconductor companies despite improving sales.
The brokerage’s sensitivity analysis of semiconductor companies under its coverage indicated that for every 1% depreciation of the US dollar against the ringgit,“Despite this, we remain optimistic about the medium to long-term outlook of the semiconductor sector in Malaysia, supported by the ongoing recovery in global demand for semiconductors and increasing trade diversion opportunities arising from the China Plus One strategy,” it said.
TA Research reiterated its “overweight” stance on the semiconductor sector, with “buy” recommendations on Unisem, MPI, Inari and Elsoft. According to the Semiconductor Industry Association, global semiconductor sales during the month stood at US$53.1bil, up 20.6% year-on-year, or 3.5% month-on-month from July 2024’s US$51.3bil.