U.S. Trade Policy Poses Challenges for Malaysia’s Technology Sector, Analysts Warn
KUALA LUMPUR, July 2 (Xinhua) — Despite expected growth in the global semiconductor market for 2025, analysts have expressed caution regarding the outlook for Malaysia’s technology sector, citing ongoing uncertainties linked to U.S. trade policies that could affect the region’s semiconductor industry.
TA Securities, a leading research house, highlighted in a recent report that potential sector-specific tariffs on semiconductor imports imposed by the United States might significantly reduce demand in end markets. This reduction could, in turn, impact the earnings of Malaysian technology companies heavily involved in semiconductor manufacturing and supply.
Key Factors Affecting Malaysia’s Tech Sector
The note from TA Securities identified three critical factors that are likely to influence the earnings and outlook of Malaysia’s technology sector moving into the second half of 2025:
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U.S. Trade Policies: The possibility of tariffs being implemented on semiconductor imports by the U.S. government is a major concern. Such measures could disrupt global supply chains and lead to lower end-user demand for semiconductors produced in Malaysia.
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Global Semiconductor Sales: While uncertainties related to trade policies loom large, the global semiconductor market is currently experiencing an upcycle that is expected to sustain positive momentum through the year.
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Malaysia’s National Semiconductor Strategy: The progress and effectiveness of Malaysia’s domestic strategy to bolster its semiconductor industry remain crucial to the sector’s resilience and growth prospects.
TA Securities warned that should the U.S. administration move forward with tariffs on semiconductor imports, it could severely disrupt the interconnected global supply chains essential for semiconductor production. This disruption might not only depress demand but could also lead corporations to delay placing orders and postponing capital expenditure due to heightened policy risks and a lack of clear visibility on trade regulations.
Ongoing Policy Risks and Market Outlook
The research house emphasized that the risk associated with U.S. trade policy will likely persist in the coming months. Corporations within Malaysia’s technology ecosystem are expected to adopt a more cautious and conservative approach to investment and expansion, which could dampen short-term growth despite underlying positive market trends.
Nevertheless, the global semiconductor market’s ongoing upcycle presents opportunities for growth, and Malaysia’s role as an important player in semiconductor production places it in a strategically important position. Continued efforts to implement Malaysia’s National Semiconductor Strategy effectively could provide some insulation against external shocks from trade tensions.
Conclusion
While the semiconductor industry worldwide demonstrates strength and growth potential in 2025, Malaysia’s technology sector faces considerable challenges due to uncertainties surrounding U.S. trade policy. The evolving geopolitical landscape requires careful navigation by Malaysian firms and policymakers to sustain growth and secure the sector’s long-term development.
Photo Caption: Bukit Bintang area in Kuala Lumpur, Malaysia, April 10, 2025. (Photo by Chong Voon Chung/Xinhua)
