Semiconductor Overweight

IN February 2024, the global semiconductor continues its upward trajectory by posting another consecutive YoY sales growth. According to the Semiconductor Industry Association (SIA), global semiconductor sales during the month stood at US$46.2 billion (3.1% MoM, +16.3% YoY) versus January 2024’s of US$47.6 billion.

This marked YoY sales recovery for the 4th consecutive month, further validating our belief that the global semiconductor market is on track to recovery. The 16.3% YoY increase in February was the strongest YoY sales growth since May 2022. The decent YoY improvement was mainly driven by China (+28.8% YoY), Americas (+22.0% YoY), and Asia Pacific/All Other (+15.4% YoY). We expect the market growth to persist during the remainder of the year.

By geography, February 2024’s sales decline of 3.1% MoM was on the back of easing across all regions, mainly from China (-4.3% MoM), the Americas (-3.9% MoM), and Japan (-2.5% MoM). Meanwhile, the slowdown was also observed in other regions, including Europe (2.3% MoM) and Asia Pacific/All Other (-1.3% MoM).

We believe the recent earthquake in Taiwan has had a minimal impact on the semiconductor industry in Malaysia. According to Taiwan Semiconductor Manufacturing Company, the world’s largest semiconductor foundry, certain facilities were suspended mainly due to precautionary measures. As of now, the fab operations have generally recovered, and the group expects minimal disruption to the chip supply. Ajit Manocha, SEMI president and CEO, expects the global semiconductor industry to continue to show strength, with strategic investments fuelling growth in key regions.

Overall, we maintain our OVERWEIGHT stance on the technology sector.