Kenanga Research has maintained its 'neutral' call on the technology sector although growth is seen in global
semiconductor sales and SEMI's (Semiconductor Equipment and Materials International) book-to-bill ratio.

It said the latest global semiconductor sales in 2013 closed the year with 4.2 per cent year-on-year (y-o-y) growth narrowly exceeded the World semiconductor Trade Statistics organisation industry growth of about two per cent.

"The strong growth was mainly driven by the United States semiconductor market on the back of better consumer spending amidst a recovering economy," Kenanga Research said in a note.

The research house said SEMI's book-to-bill ratio also remained healthy at 1.02 times in December, with decent growth seen on its December's worldwide bookings and billings year-on-year and month-on-month.

"While the indicators were pointing to the recovery of the semiconductor industry, we do not expect general improvement to be reflected in all companies under coverage, given the diverse product mix profile as well as the difference in time-lag effect in reflecting recovery for each company," it added.

Kenanga Research said the outlook for companies with higher exposure in resilient products such as the smartphones and tablets segment and automotive segment tend to be on the recovery forefront.

The research firm said the Malaysian Pacific Industries Bhd is well poised to benefit from the positive spillover and the only 'outperform' call in the industry.

On hard disk drive (HDD) front, Kenanga Research said the dwindling demand will partly be cushioned by Enterprise HDD, with the total market share of about 12 per cent of total HDD shipments.

However, the research house said amidst the increasing demand for enterprise and cloud storage, growth will likely remain flat this year in light of the overall slower consumer spending in Desktop HDD and Mobile HDD.-- Bernama