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Bursa’s semiconductor counters shine on muted impact from US Chips Act

KUALA LUMPUR (July 28): Bursa Malaysia’s semiconductor counters were among the top gainers in Thursday’s (July 28) morning trade, as Malaysia sees muted impact from the US Chips Act.

Malaysian Pacific Industries Bhd was the top gainer as at the time of writing, rising 80 sen or 2.59% to RM31.70, with some 109,800 shares traded. At the current price, the stock was valued at RM6.65 billion.

Fifth gainer ViTrox Corp Bhd was up 2.97% or 22 sen to RM7.62, giving it a market capitalisation of RM7.2 billion.

KESM Industries Bhd, meanwhile, climbed 12 sen or 1.72% to RM7.10, valuing it at RM305.4 million, while Unisem (M) Bhd grew 3.16% or eight sen to RM2.61, with a market capitalisation of RM4.21 billion.

In a note on Thursday, PublicInvest Research said the country’s semiconductor sector would see a muted impact from the recently passed US$52 billion (about RM231.66 billion) US Chips Act — the Bill that has been lobbied for by US lawmakers as a key part of the ongoing US-China competition, both economically and as a matter of national security, given the intent on reducing reliance on Asian chip suppliers.

The Chips Act allocates US$39 billion tax breaks and subsidies to semiconductor companies investing in fabrication facilities (fabs) in the US, and it offers another US$11.2 billion for semiconductor research and development.

“We believe the new Bill will not see any impact on the Malaysian semiconductor industry, as it is aimed at attracting investments for front-end fabs that are below seven-nanometre technologies, which Malaysia does not produce,” said PublicInvest.

On another note, it said investors had ditched the more expensively-valued sectors like technology in recent times amid the aggressive global rate hikes, resulting in sector valuations to fall more than 36% year-to-date to current levels of 22 times earnings multiple, from 35 times previously.

“We believe investors should take the opportunity to relook at quality technology names with a competitive edge and strong track record,” said the research house, adding that it maintained its "overweight" call for the technology sector.


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