KUALA LUMPUR: Malaysia stands to gain from the US-China trade war, according to Public Investment Bank (PublicInvest).
The investment bank said that Malaysian players have started seeing the spillover effects of the intensifying US-China trade sanctions as more technology-related investments are pouring into the country.
It said that some Chinese players are considering passing some chip packaging orders to their Malaysian peers.
"As sentiment improves, the capex (capital expenditure) spending cycle has also resumed," the investment bank said in a note.
PublicInvest highlighted that in an effort to broaden their supply chain and mitigate risks amid increasing controls on US chip exports and chip-making equipment, an increasing number of Chinese semiconductor design firms are leveraging Malaysia's advanced chip packaging services.
They aim to assemble a type of graphic processing unit suitable for artificial intelligence (AI) training, it said.
"Sources cited that the requests only encompass assembly and do not involve fabrication of the chip wafers, which would not contravene any US restrictions.
"IDTechEx has identified four main application areas for advanced semiconductor packaging, namely, high-performance computing applications or data centres, communication networks, autonomous cars, and consumer electronics," it said.
PublicInvest said that following various upbeat outlook reports for global wafer capacity, semiconductor sales, equipment orders, and personal computer (PC) sales, the firm is confident that the global technology down-cycle has bottomed out.
Numerous technological advancements in PCs, smartphones, apps, and autonomous cars have been made possible by the AI boom, it said.
PublicInvest upholds its 'overweight' recommendation for the technology sector.