PETALING JAYA: Semiconductor trade is expected to remain an important driver of Malaysia’s external sector and overall economic growth, says Phillip Capital Research.
In a note, the research house said global semiconductor sales have continued to expand at an unprecedented pace, rising by 144.3% year-on-year (y-o-y) in August 2026, the fifth consecutive month of growth exceeding 100%.
This brought year-to-date growth to approximately 100%, with sales surpassing the US$1 trillion mark for the first time in history.
“Semiconductor sales are expected to remain strong in the remaining months of 2026, with growth momentum particularly pronounced in the United States and Asia-Pacific, both major trading partners of Malaysia,” it added.
Given Malaysia’s strong position in the global semiconductor supply chain, Phillip Capital said the country is well placed to benefit from the ongoing semiconductor upcycle, supported by continued advances in artificial intelligence (AI) development.
The World Trade Organisation (WTO) has upgraded its global merchandise trade outlook, citing that AI-related trade has helped offset headwinds from the ongoing conflict in the Middle East.
The WTO now projects global merchandise trade volume to grow by 3.9% in 2026, up from 1.9% in its March 2026 baseline forecast. For 2027, a growth of 4.1% is forecast, compared with its previous projection of 2.6%. Overall, Malaysia’s domestic exports grew faster in September 2026, rising 54.7% y-o-y, the fastest growth since April 2021, driven mainly by electrical and electronics (E&E) products.
On a year-to-date basis, domestic exports rose by 28.3% y-o-y in the first nine months of 2026. The E&E sector, which accounted for nearly 46% of total domestic exports, grew faster by 72.5% y-o-y amid the global semiconductor upcycle.
