‘Tech sector in for another record year’

> MIDF Research cites robust sales, demand for memory products and huge capital spending

PETALING JAYA: MIDF Research has maintained its positive stance on the technology sector, which it said is on track for another record year, after March 2017 sales grew by 18.1% year-on-year.

The increase was underpinned by solid pace of growth across all markets; demand in the memory product segment continues to outpace the rest and the semiconductor investment cycle continues to be seen with billings breaching the US$2 billion (RM8.7 billion) mark.

In recent years, MIDF Research said, China’s government has been supporting the domestic semiconductor industry with tremendous capital budgets. This has led to China gradually playing a pivotal role in upholding the demand of semiconductor products.

At present, sales from China account for one-third of global sales. It is also the main export destination of Malaysia’s semiconductor products.

MIDF Research highlighted that higher semiconductor sales were seen across all regions.

“Moving forward, we expect the sales growth momentum emanating from China to remain robust in the foreseeable term. This is in tandem with the anticipated heavy investment in fab equipment in the upcoming years. In the immediate term, we expect the global semiconductor sales to continue to record positive sales growth on a yearover-year basis,” MIDF Research said in its technology sector update yesterday.

Apart from the smart devices segment, it also expects healthier demand from the automotive, storage and healthcare markets.

“The automotive market will be driven by the continuous effort to increase the average semiconductor content per vehicle. Demand from this market is also less susceptible to seasonality factors, thus providing a steadier stream of revenue.

“Meanwhile, higher demand for the storage market would be supported by the cloud computing and data centre industries,” it explained.

All factors considered, MIDF Research maintains its positive stance for the technology sector.