KUALA LUMPUR: CIMB Securities Sdn Bhd expects the launch of the Malaysian Semiconductor IC Design Park (MSICP) in Selangor to be a positive catalyst for boosting the Malaysian integrated circuit (IC), or chip, design ecosystem.

CIMB Securities in its note today said it is a positive catalyst towards Malaysia meetings its goals of creating 10 Malaysian companies in design and advanced packaging with annual revenue between RM1 billion to US$1 billion, and 100 companies with annual revenue

of at least RM1 billion.

"Overall, we view the government's initiative to capitalise on Malaysia's strategic position as a neutral destination in the global semiconductor supply chain, amid ongoing trade tensions between the US and China, as a timely move to capture potential trade diversions," CIMB Securities said.

The MSICP was officially launched yesterday at the Puchong

Financial Corporate Centre (PFCC).

The park's objective is to facilitate the transition from a 'Made in Malaysia' to a 'Made by Malaysia' initiative, with a focus on high-value front-end IC design. Currently, Malaysia holds a 13 per cent global market share in the backend semiconductor chip assembly and test, and MSICP aims to elevate this position.

"The ongoing trade war between the US and China has created opportunities and reduced the entry barriers for smaller IC design companies to compete with major fabless players due to trade restrictions."Hence, we see the government's decision to promote IC design as a shot in the arm for domestic IC design players," it said in a note today.

To recap, the government is allocating at least RM25 billion (US$5.3 billion) over the next five to ten years in financial support to cultivate local IC design and advanced packaging champions in its efforts to move up the value chain.

The MSICP was developed through a global collaboration between the federal and stategovernments, international semiconductor companies, and venture capitalists.

Overall, CIMB maintained an "Overweight" rating on the technology sector as it believes the sector is in the midst of a new upcycle with a potential valuation re-rating.

This is based on improving earnings visibility led by the proliferation of artificial intelligence (AI), acceleration in supply chain diversification, and RM25 billion fiscal injections by the government in the form of National Semiconductor Strategy.

The firm has picked Inari Amertron Bhd and Malaysian Pacific Industries Bhd (MPI) as its preferred stocks in the sector.

https://www.nst.com.my/business/economy/2024/08/1087832/selangor-semiconductor-chip-design-park-positive-catalyst-boosting