Malaysia's tech sector set for second-half growth on AI demand
Malaysia’s technology sector is forecast to expand in the second half of 2026, driven by artificial-intelligence and data-centre demand, though analysts remain divided on how fast and how broad the rebound will be.
Source: malaysiasun.com · July 21, 2026 at 8:29 AM · AI-assisted report
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KUALA LUMPUR, 21 JULY 2026 —
Malaysia’s technology sector is forecast to expand in the second half of 2026, driven by artificial-intelligence and data-centre demand, though analysts remain divided on how fast and how broad the rebound will be.
Market Impact
TA Securities said it is cautiously optimistic on the sector even as global semiconductor sales are expected to rise further. The research house said gains will be concentrated in AI-linked segments such as integrated-circuit design, optoelectronics, semiconductor equipment, and packaging and testing.
Firms tied to AI, data centres, networking and high-performance computing are likely to outperform those still reliant on weaker end-markets such as personal computers and smartphones, TA Securities added.
Trade uncertainties, geopolitical tensions, memory-supply constraints and a stronger ringgit are the main risks weighing on performance, the house said. It added that the National Semiconductor Strategy should provide longer-term support by lifting domestic capabilities and pushing companies into higher-value activities.
Maybank Investment Bank expects most Malaysian tech companies to meet market expectations, with AI and data-centre demand remaining the primary driver amid sustained hyperscaler spending. The bank also pointed to photonics and optical transceivers, advanced cooling and testing solutions, and advanced packaging as new growth areas.
Maybank said Malaysia’s digital push is shifting from smart-city projects toward “AI Cities,” aimed at using artificial intelligence to raise urban efficiency and position the country as a regional AI hub.
The bank maintained a positive view of the software sector, citing its largely domestic and regional footprint as insulation against global geopolitical risk. Continued digitalisation across industries is expected to keep demand resilient through the rest of the year.
MBSB Research kept a neutral stance. While it acknowledged that AI is improving semiconductor fundamentals and lifting global sales, AI-related revenue has yet to become the dominant earnings contributor for most companies. Persistent smartphone-market challenges—memory shortages, geopolitical tensions, tariff uncertainty and foreign-exchange swings—could keep pressure on earnings, the house warned.