Tech Stocks Surge on Positive Semiconductor Industry Outlook

In a notable development on Friday, tech stocks on Bursa Malaysia experienced substantial gains, buoyed by a positive report from the US-based industry association SEMI. The association's quarterly World Fab Forecast, released on January 2, highlighted a forecasted record-high global semiconductor capacity in 2024. The news ignited optimism among investors, particularly benefiting outsourced semiconductor assembly and test (OSAT) firm Malaysian Pacific Industries Bhd (MPI), which emerged as the top gainer. 

Among the top gainers were prominent tech companies, including Inari Amerton Bhd, KESM Industries Bhd, Mi Technovation Bhd (Mi Tech), Dufu Technology Bhd, Pentamaster Corp Bhd, and Unisem (M) Bhd. These companies witnessed notable increases in their stock prices, contributing to the positive momentum in the tech sector. 

MPI, securing the top spot on the gainers list, saw a 1.86% rise, closing at RM28.52. Other notable performers included Inari, up 4.36% at RM3.11, KESM, rising 1.02% to RM6.95, and Mi Tech, increasing by 3.87% to RM1.88. Dufu, Pentamaster, and Unisem also experienced positive movements, closing higher by 3.28%, 1.36%, and 1.86%, respectively.  
The driving force behind this surge in tech stocks was SEMI's optimistic forecast. According to the World Fab Forecast report, global semiconductor capacity is expected to increase by 6.4% in 2024, surpassing the 30 million wafers per month (wpm) mark for the first time. SEMI attributes this growth to capacity expansions in leading-edge logic and foundry, along with increased demand for applications such as generative artificial intelligence and high-performance computing. 

Despite the positive industry outlook, Kenanga Research maintains a "neutral" stance on the technology sector. The research firm points to a decreasing trend of contraction, suggesting a potential cycle bottom and meaningful recovery by the second half of 2024 (2H2024). Recent data indicating a progressive reduction in semiconductor sales contraction supports this perspective.