Malaysia's E&E Trade Shines with 15% YoY Growth, but Bursa Tech Index Sinks 26%

Global semiconductor sales in January 2025 reached USD56.5 billion, up 17.1% year-on-year (YoY) from USD47.9 billion in January 2024, driven by strong AI chip demand, though they dipped 1.7% month-on-month (MoM) from USD57.5 billion in December 2024 due to seasonal slowdowns. Regionally, YoY sales grew in the Americas (50.7%), Asia Pacific (9.0%), China (6.5%), and Japan (5.7%), but Europe saw a 6.4% decline. MoM, only Asia Pacific grew (1.6%), while others weakened.

E&E Trade Shines

In Malaysia, the E&E sector—a key economic driver—showed robust YoY external trade growth, with exports up 15% and imports up 9%, reflecting sustained demand. However, MoM figures revealed a seasonal 14% export decline, contrasted by a 9% import rise. Meanwhile, the Bursa Technology Index, closely tied to Malaysia’s tech and E&E performance, faced significant pressure, dropping 26% year-to-date (YTD) in 2025 and 16% MoM in February. This decline was fueled by disappointing quarterly earnings, cautious tech outlooks amid tariff threats, and external headwinds like AI export restrictions and Trump’s tariff uncertainties.

Geopolitically, US-China tensions and potential US tariffs on Taiwanese chips are reshaping supply chains, with TSMC boosting US investments by USD100 billion. These factors add volatility, pushing Malaysia and global players to diversify supply chains and build buffers. The Bursa Technology Index’s weakness highlights near-term risks for Malaysia’s tech sector, despite its strong YoY E&E trade performance, as seasonal dips and global uncertainties loom large in 2025.

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