Accelerating supply chain diversification and supportive government policies will also boost earnings, he added.
There is more upside in the sector, given that the Bursa Malaysia Technology Index peaked at 57 times 12-month forward earnings “during the last upcycle,” Mohd Shanaz said. The gauge — having notched five straight months of gains through June, the longest such streak since 2021 — is currently trading at below 30 times.
CIMB prefers outsourced semiconductor assembly and test providers, with Inari Amertron Bhd. and Malaysian Pacific Industries Bhd as favored picks for exposure to the sector.
See also: Generative AI expected to have a regional impact of US$1.6 trillion by 2027
The tech stock index dropped as much as 0.6% Friday, but remained on track for a weekly gain.
