Malaysian tech stocks, which rallied in the previous three trading sessions boosted by news of US tariff exemption on consumer electronics and chips, fell down to earth today.
Semiconductor-related stocks were among the losers with Inari Amertron Bhd, the sector’s biggest company with a market value of RM6.67 billion, down as much as 4%. Year to date, it has fallen 42%, in tandem with other technology stocks.
Malaysian Pacific Industries Bhd was down as much as 5.5%, Greatech Technology Bhd (4.5%), Pentamaster Corp Bhd (4.4%), Unisem (M) Bhd (3.5%), Frontken Corp Bhd (3.1%), and ViTrox Corp Bhd (3%).
However, software and information technology counters such as ITMAX System Bhd, MyEG Services Bhd, and CTOS Digital Bhd – which does not export their services to US – held steady.
The Bursa technology index, which tracks 49 stocks in the sector, fell 1.5% and is down over 30% year to date.
Positive sentiment on semiconductor-related stocks dissipated after the US announced overnight it is investigating imports of semiconductors and pharmaceuticals under the Trade Expansion Act 1962 on grounds that extensive reliance on foreign production of medicine and chips is a “national security threat”.
The investigation, which began on April 1, follows exemptions announced over the weekend for consumer electronics and semiconductor equipment from punitive reciprocal tariffs. The probes need to be completed within 270 days of their initiation.
Trump has made tariffs a central plank of his administration’s economic and national security policies, rolling out a series of aggressive duties against trading partners.
The announcements have caused turmoil in global financial markets, with most US stock indexes down more than 10% from record highs hit following Trump’s election win last November.
The US slapped a 24% reciprocal tariff on goods imported from Malaysia in early April. However, semiconductors were among goods exempted from the tariff.
Trump on April 9 put on hold the reciprocal tariffs on scores of countries although the heftiest tariffs on China remain in place.
While pharmaceuticals and semiconductors are exempt from those duties, Trump has said they will face separate tariffs. He said on Sunday he would be announcing tariffs on imported semiconductors over the next week.
Electrical and electronic products account for about 40% of the total export of Malaysia, which is home to some of the world’s biggest semiconductor companies. In 2023, the Malaysian semiconductor industry employed approximately 640,000 people.