US tariff plan may spark semiconductor front-loading
Analyst Mohd Shanaz Noor Azam said the activity could provide a temporary boost to demand, followed by a potential slowdown once the tariff comes into effect, though no implementation date has been confirmed.
He said the potential implementation of the semiconductor tariff would be negative for the sector, although he did not rule out possible exemptions for certain multinational corporations (MNCs) that could renegotiate terms through strategic investment commitments in the US.
"Among Malaysian names, automated test equipment (ATE) makers could face the most direct near-term impact given their relatively high US revenue exposure.
"That said, some may benefit over the longer term from increased domestic capacity build-up in the US," he said.
Mohd Shanaz said among local ATE players, players, Greatech Technology Bhd and Genetec Technology Bhd are the most exposed to the US market, with 65 per cent and 76 per cent of their FY24 revenue derived from US customers, respectively.
Meanwhile, outsourced semiconductor assembly and test (OSAT) players such as Unisem (M) Bhd and Malalysian Pacific Industries Bhd derive about 67 per cent and 20 per cent of their FY24 revenue from US customers.
Inari Amertron has minimal direct US exposure at less than one per cent, as most of its products are shipped to customer facilities in Malaysia and Singapore.
"Overall, we estimate that less than 10 per cent of the OSAT sector's revenue is ultimately shipped to the US, as most production volumes are routed through downstream assemblies in China, Mexico, or India, catering to demand in China, Europe and the rest of Asia.
"Within the electronics manufacturing services (EMS) segment, VS Industry Bhd and SKP Resources Bhd derive around 50 per cent and 20 per cent of their revenue, respectively, from US customers," Mohd Shanaz added.
Beyond demand risks, he said the uncertainty surrounding US tariff policy could delay new investments and expansion plans in Malaysia, especially for MNCs whose operations are closely tied to US end-demand.
He said a prolonged overhang from potential tariffs may prompt US-based semiconductor and electronics firms to pause or reallocate capital expenditure.
Exports of electrical and electronic products to the US reached RM119.9 billion in 2024, accounting for about 20 per cent of Malaysia's total E&E exports.
Notably, semiconductor exports to the US stood at RM60.6 billion, equal to roughly 20 per cent of Malaysia's total semiconductor export value in 2024.
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