KUALA LUMPUR (June 10): TA Securities Holdings Bhd has maintained its “overweight” rating on the semiconductor sector, which is poised to improve further, following the sales growth in April.

However, within the technology stocks under its coverage, the research house has a “buy” call only on Inari Amertron Bhd (KL:INARI), with a target price (TP) of RM4.30, according to its note on Monday.

TA Securities, on the other hand, maintained “hold” on Unisem (M) Bhd (KL:UNISEM) with a TP of RM4.37, Malaysian Pacific Industries Bhd (KL:MPI) at a TP of RM41.10, and Elsoft Research Bhd (KL:ELSOFT) with a TP of 58 sen.

“We expect the sentiment of the semiconductor sector in Malaysia [to] improve further, backed by an anticipated healthy recovery in global demand and increasing trade diversion opportunities as a result of the China Plus One (China+1) strategy,” TA Securities said.

Additionally, the World Semiconductor Trade Statistics (WSTC) organisation has recently revised its forecast upwards for global semiconductor sales, with US$611 billion (16% year-on-year/y-o-y) in 2024, compared with previous forecast of US$588.4 billion (13.1% y-o-y).

“The strong growth will be fuelled by robust double-digit growth from memory and logic categories,” it said, citing WSTC.

It noted that the Americas and Asia Pacific regions are anticipated to experience substantial growth, with projected increases of 25.1% and 17.5%, respectively.

Conversely, Europe is expected to see a minimal growth of 0.5%, and Japan is forecasted to experience a slight decrease of 1.1%.

Nonetheless, TA Securities flagged several downside risks to its rating, including heightened geopolitical tensions weighing on economic growth and disrupting supply chains, weaker-than-expected sales, and the weakening of the US dollar against the ringgit.