MBSB Research said on Tuesday that talent shortage will limit the earnings growth for Malaysia’s technology sector.
The research house said in a note that given the explosive growth in the artificial intelligence (AI) and data center sphere, there is a severe structural talent shortage.
For Malaysia, the issue is further compounded by the Government’s plan to move up from back-end assembly and testing into integrated circuit (IC) design, advanced packaging and innovation-led manufacturing.
Cited newswire, MBSB said the local industry needs around 50,000 skilled engineers to meet current demand while engineering graduates only come up to 5,000 annually.
On this note, the National Semiconductor Strategy (NSS) targets training 60,000 highly skilled engineers by 2030. Nonetheless, we understand that talent shortage has currently limit the potential earnings upside.
Meanwhile, the global semiconductor sales (GSS) for the month of July grew by 135.1 percent year on year and 6.4 percent month on month to $146.8 billion. This represents 17 months of sequential growth.
Given the run rate, the 2026 sales projection of $1.51 billion could potentially be surpassed, said MBSB.
Geographically, the Americas, Asia Pacific and China continue to lead the sales expansion.
Moving forward, MBSB view that demand continues to be underpin by AI infrastructure and data center buildouts.
According to newswire, Anthropic Co-founder and Chief Executive Officer Dario Amodei, has called for the pace of development of AI models to slow down and to be closely monitored.
His view is also echoed by other notable figures such as Sam Altman of OpenAI, Elon Musk of SpaceXAI, and Demis Hassabis of Google DeepMind.
The slackening will provide more time to companies and governments to assess and address the potential risk which mainly revolve around safety.
Given the pace of development of the AI models, MBSB said there has not been a proper safety protocols as well as regulation to control the development and usage of AI.
“Note that there has been cases of AI agents going ‘rogue’. We view that such development may limit the future earnings growth,” it added.
According to IDC, the second quarter global smartphone shipments declined by 6.7 percent year on year to 277.5 million units.
Major Chinese brands such as Xiaomi, OPPO and Vivo posted double-decline in sales due to the ongoing memory crisis which disrupt supply and increase the component cost.
On the flip side, Samsung and Apple managed to increase the shipment by 8.1 percent year on year and 14.9 percent year on year respectively.
The improvement in Samsung shipment was due to better supply availability and delayed launch of the S26 series.
Moreover, there is less competition in the budget segment as the Chinese peers narrowed down their offerings.
Meanwhile, Apple’s second quarter shipment performance was supported by iPhone 17 and stable pricing.
“We view that Apple’s strong rebound should have positive impact on the supply chain. Looking ahead, the launch of iPhone 18 and Duo could potentially keep support Apple position in the premium segment,” said MBSB.
Based on newswire, it noted demand for iPhone Duo has been encouraging, though this could be partially tampered by the price tag and constrained supply.
Due to the ongoing geopolitical risks in the semiconductor risk, MBSB said the Southeast Asia countries has been the main beneficiary of “China+1” and/or “Taiwan+1” strategies whereby multinational corporations (MNC) look to build or sourced secondary facilities in neutral territories to promote supply chain continuity.
“In the regard, these countries have built unique position in the industry. Nonetheless, we view that there are still some forms of competition,
“For Malaysia, we view that Vietnam could post the greatest competition given the similar undertaking,” said the research house.
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