Weakening global demand for tech sector

TheStar Thu, Jan 05, 2023 07:01am - 2 months View Original

HLIB Research said PCs and smartphones make up over 60% of the worldwide semiconductor demand, and therefore weaknesses there is unlikely to be neutralised by the positive outlook for the automotive industry.

PETALING JAYA: Analysts have turned indifferent towards the technology sector on the back of weakening global demand, underpinned by the now familiar adverse effects of rising interest rates, runaway inflation and geopolitical conflicts.

Hong Leong Investment Bank (HLIB) Research noted the Bursa Malaysia Technology Index (KLTech) underperformed the FBM KLCI in 2022 with a 34% fall compared to the 5% slide recorded by the broader index, and it is anticipating the industry’s average growth to shrink by 4% in 2023, backed by a forecast from World Semiconductor Trade Statistics.

“A major sector wide de-rating on the back of a hawkish US Federal Reserve was coupled with unsatisfactory financial results impacted by waning demand, inventory adjustment and geopolitical conflicts,” the research house said in a note yesterday.


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