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KUALA LUMPUR (Oct 19): The recent tech sector pullback has created an “attractive accumulation opportunity”, BIMB Securities said in its latest sector note, on favourable structural growth outlook including in the advanced packaging segment.
Semiconductor demand visibility and technological progress in segments like advanced packaging are among key takeways from BIMB Securities’ recent tech conference, both of which could favour Malaysian players, the research house said.
Advanced packaging could “remain one of the fastest-growing areas of semiconductor capital expenditure over the coming years”, benefitting those in semiconductor equipment, advanced packaging services, precision engineering, automation, testing and materials, it said.
Top picks for BIMB include Inari Amertron Bhd (KL:INARI) and SkyeChip Bhd (KL:SKYECHIP), with target prices of RM2.90 and RM3.79 respectively.
Tech firms led global equity losses last week amid esclating concerns over the massive capital needed for artificial intelligence (AI) infrastructure.
The Bursa Malaysia Technology Index fell by 5.3% week-over-week, making it the primary sector laggard in the period.
In its note, BIMB highlighted constrained bottlenecks in memory, advanced packaging and optical connectivity. “HBM and DRAM supply remain tight, while optical interconnect technologies such as near-packaged optics (NPO) and co-packaged optics (CPO) are becoming increasingly important,” it added.
For Malaysia, its manufacturing capabilities and established ecosystem may “not be sufficient if industry value increasingly shifts towards advanced packaging, semiconductor materials, IC design and R&D-intensive activities,” said BIMB.
“To avoid being relegated to lower-value assembly activities, Malaysia must continue investing in advanced packaging capabilities, R&D and talent development,” it said.
