SkyeChip, NationGate head the pack as tech rally continues

Malaysian technology stocks experienced a rally, with SkyeChip Bhd and NationGate Holdings Bhd attracting significant attention from investors. The Bursa Malaysia Technology Index surged to a two-year high of 79.37 points, marking its highest level since July 2024. Research houses identified advancements in the AI semiconductor supply chain as potential catalysts for further gains in domestic technology stocks.

SkyeChip rose by up to 10.3% or 31 sen, closing at RM3.25, valuing the firm at RM5.84 billion. The semiconductor design company surged 269% since its IPO price of 88 sen upon listing on May 20. NationGate jumped by up to 8.4% or 12 sen, closing at RM1.54, with a market capitalisation of RM3.51 billion. Its shares have climbed 69% year to date, making it the second most traded stock on Bursa Malaysia with 66.8 million shares traded.

Dagang NeXchange Bhd led the trading volume with over 150 million shares exchanged, closing at RM50 sen, valued at RM1.74 billion. Stratus Global Holdings Bhd saw a rise of up to 5.9% or 17 sen, closing at RM3.03, marking a 5.2% increase. The semiconductor automation specialist surged 279% since its IPO price of 80 sen following its listing on July 21.

Inari Amertron Bhd also benefitted from the rally, up 5% or 12 sen, reaching a market cap of RM9.67 billion. The semiconductor assembly and test company expanded a 45% year-to-date gain. BIMB Securities noted that the AI investment cycle is expanding beyond computing power, delving into high-speed optical connectivity, AI accelerators, advanced packaging, and semiconductor infrastructure.

The local semiconductor ecosystem is thriving across these sectors, with companies gradually shifting towards higher-value activities such as integrated circuit design, photonics, advanced packaging, semiconductor materials, and equipment.

Supply-chain diversification, driven by geopolitical fragmentation and China's pursuit of semiconductor self-sufficiency, could bolster Malaysia's position under the China+1 strategy, which aims to mitigate risk by diversifying investments beyond China. Public Investment Bank highlighted that a potential US restriction on new-model optical transceivers manufactured in China could further drive diversification of the optical supply chain towards Malaysia.

This could translate into greater opportunities for Malaysian and Asean semiconductor manufacturers in advanced photonics, optical assembly, testing, and packaging as multinational companies diversify production away from China.