Semiconductor: Trade war uncertainties and weak end-market demand impact

Malaysia has signed a USD 250 million agreement with ARM Holdings over ten years to acquire semiconductor-related licenses and expertise, aligning with its National Semiconductor Strategy (NSS).

Analysts stay they believe this initiative will be driven by ARM’s robust architecture and extensive partner ecosystem.

However, ongoing trade war uncertainties and weak end-market demand are expected to create a challenging near-term outlook for the industry.

Trade war uncertainty

Given the current trade tensions, this move is timely and could help mitigate some of the impact of the U.S.’s upcoming tariffs, which may affect trade-dependent nations. Notably, President Donald Trump is set to announce reciprocal tariffs starting April 2, 2025, in response to perceived unfair trade practices by other countries.

Strong semiconductor industry

This partnership is expected to leverage ARM’s architecture and ecosystem to strengthen Malaysia’s semiconductor industry. However, near-term challenges persist due to trade war uncertainties and weak end-market demand.

The move is seen as timely, as it could help mitigate the impact of upcoming U.S. tariffs, set to take effect on April 2, 2025, under President Donald Trump’s policy to counter unfair trade practices.

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