KUALA LUMPUR: MIDF Research (MIDF) has maintained its positive call on the semiconductor industry, noting that the sector is still set for explosive growth – eclipsing all other sectors, including financial and industrial – due to the widespread adoption and integration of technologies.

In a research note today, it said that emerging technologies such as artificial intelligence, automotive electronics as well as augmented and virtual reality depend heavily on the semiconductor industry to provide the necessary computing power.

"The worldwide sales of semiconductors remained strong in the first quarter of this year despite the ongoing chip crunch, with sales at US$151.7 billion or 23.0 per cent growth year-on-year (y-o-y)," it said.

Global sales for March 2022 stood at US$50.6 billion, and the United States continued to surpass other regional markets, recording a 40.1 per cent y-o-y growth.

Meanwhile, MIDF said since 2000, the total semiconductor research and development (R&D) spending as a percentage of worldwide sales outperformed the four-decade historical average of 14.5 per cent in all but five years (2000,2010, 2017, 2018, and 2020).

"In these five years, lower R&D-to-sales ratios had more to do with the strength of total revenue growth than weakness in R&D spending by semiconductor suppliers," it said.

Meanwhile, MIDF also maintained its 'buy' call on semiconductor companies, namely Inari Amerton (target price RM4.55) and Unisem (M) Bhd (target price RM4.33).