Malaysia rides on global semiconductor uptick
KUCHING: Malaysia continues to gain from the global rise in semiconductor sales with the country’s exports being driven by strong demand for electronic identity cards (ICs).
To note, Malaysian exports of semiconductor products in January 2017 grew by 12 per cent year on year (y-o-y) to RM12 billion which was consistent with the pace of global semiconductor sales.
The growth was driven by a 16 per cent y-o-y surge in exports of electronic ICs, followed by 15 per cent in piezoelectricity crystals and parts, but partly dragged down by other segments with a three per cent decline.
“We believe the strong exports of electronic ICs are partly attributed to a weaker ringgit environment, which is advantageous to Malaysian semiconductor players,” said AmInvestment Bank Bhd (AmInvestment Bank) in a report yesterday.
“On a quarterly basis, Malaysian semiconductor exports declined across all segments owing to seasonal effect.”
Globally, AmInvestment Bank saw that semiconductor sales recorded its largest y-o-y growth since November 2010.
“Semiconductor global sales continued to register solid 14 per cent y-o-y growth in January, marking the largest annual increase in more than six years since November 2010. However, January’s global sales inched down seasonally by one per cent month on month (m-o-m) to US$31 billion.
“Regionally, semiconductor sales increased across all regions with the largest growth in China, which rose 21 per cent, followed by America with 13 per cent, Japan with 12 per cent, Asia Pacific with 11 per cent and lastly, Europe with five per cent.”
Meanwhile, on Feb 22, 2017, the World Trade Organization (WTO) announced that the long-advocated Trade Facilitation Agreement (TFA) has entered into force, which is expected to lower costs of trade by 14 per cent and boost global trade by three per cent a year from the liberalisation of bureaucratic red tape.
“We believe this will benefit the Malaysian semiconductor players as Malaysia is among the members that have ratified TFA,” opined AMInvestment Bank.
Additionally, the World Semiconductor Trade Statistics (WSTS) has recently revised its growth forecasts for 2017F upwards from three per cent y-o-y to 6.5 per cent. The largest upward revision is seen in the Americas region, which increased from five per cent y-o-y previously to 10 per cent on account of the transition from 2D NAND to 3D NAND flash memory. For this reason, WSTS now expects the memory segment to grow by 13 per cent y-o-y versus only four per cent previously.
“On another positive note, billings reported by Semiconductor Equipment and Materials International (SEMI) soared by 52 per cent y-o-y to US$1.9 billion in January.