Technology Sector Faces Adjustment Pressure Amid Uncertain Chip Outlook

March 5, 2026
Sector Analysis
Star Biz

Malaysia's technology sector experienced a general decline today, influenced by uncertainties in the global chip industry outlook. Malaysian Pacific Industries (MPI) fell 1.2% and Unisem (M) Bhd dropped 1.8%. Investors are concerned that high inventory levels and a slowdown in demand will impact future earnings, leading to a cautious sentiment across the sector.

Today, Malaysia's technology sector faced significant adjustment pressure, with the FBM ACE Technology Index declining by 1.0%. Major semiconductor players like Malaysian Pacific Industries (MPI) fell 1.2% to RM35.20, while Unisem (M) Bhd dropped 1.8% to RM3.85. Market analysts pointed to challenges in the global chip industry, including high inventory levels and a slowdown in end-demand, particularly in the smartphone and personal computer segments. Despite strong long-term demand for Artificial Intelligence (AI) chips, short-term uncertainties have led investors to take profits. The technology sector is expected to continue experiencing volatility in the coming months until global economic recovery and a clear reversal in the chip cycle become evident.
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