KUALA LUMPUR, Jan 25 — CGS-CIMB Securities Sdn Bhd forecasts the Malaysian semiconductor sector’s sales and net profit to rise 13 per cent and 39 per cent respectively, in 2021 on the back of higher utilisation.
In a research note today, the brokerage firm said net profit growth is expected to be propelled by radio-frequency (RF) content growth in 5G networks and smartphones, recovery in automotive demand and robust demand for cloud infrastructure services.
“We upgrade the national semiconductor sector from ‘neutral’ to ‘overweight’ on 5G network proliferation and higher power management content in electric vehicles (EVs),” it said.
It noted that the World Semiconductor Trade Statistics had projected industry sales to grow 8.4 per cent this year driven by higher demand across Asia Pacific, Americas, Japan and Europe, led by double-digit growth from memory.
It further noted Semiconductor Equipment and Materials International’s expectation of increased demand by six to seven per cent of assembly, packaging and test equipment in 2021-2022, thanks to advanced packaging applications for 5G smartphone and base station infrastructure and high-performance computers.
CGS-CIMB said the sector would also benefit from stronger RF chip demand on the back of rising 5G smartphone sales volume in 2021, in line with TrendForce’s growth estimation of global 5G smartphone production from 240 million in 2020 to 500 million units this year.
It maintains an “add” call on Inari Amertron Bhd and Malaysian Pacific Industries with a target price of RM3.70 and RM36 respectively. — Bernama
