PIVB Maintains 'Overweight' On Tech Sector Following MITI's AI Chip Export Measure

KUALA LUMPUR, July 15 (Bernama) -- Public Investment Bank Bhd (PIVB) has maintained its “overweight” rating on the technology (tech) sector following the Ministry of Investment, Trade and Industry’s (MITI) announcement on artificial intelligence (AI) chip export control measures. 

Yesterday, MITI imposed a trade permit requirement on all exports, transshipments and transits of high-performance United States (US)-origin AI chips as part of efforts to close regulatory gaps.

The new measure falls under Section 12 of the Strategic Trade Act 2010 (STA 2010), known as the Catch-All Control provision. 

It mandates individuals or companies to notify the authorities at least 30 days in advance if they intend to export, transship, or transit any item not listed in the Strategic Items List (SIL), where there is knowledge or reasonable suspicion that the item may be misused or involved in restricted activities.

In a research note today, PIVB views that the new restriction may help close regulatory loopholes and prevent stricter legal action from the US government, which is considering new export restrictions on AI chips to Malaysia and Thailand.

“In our view, the enforcement of trade permits may reduce the risk of a US-imposed AI chip export ban on Malaysia and Thailand.

“However, it could increase compliance burden on companies handling US-origin AI chips as well as the risk of delays,” it said. 

Following the latest initiative, the investment bank believes there is a low risk of a US chip export restriction being imposed on Malaysia, which is positioned to become a data centre hub in Southeast Asia.

“Our channel checks indicate that five multibillion-ringgit data centre contract tenders from a US-based hyperscaler are expected to be launched in the coming months,” it added. 

The research house noted that Malaysia exported US$16.2 billion (US$1=RM4.24) worth of chips to the US in 2024, making up nearly 20 per cent of all US semiconductor imports.

“Generally, Malaysia does not fabricate these AI chips, but these chips usually enter Malaysia for testing, packaging, and assembling, and are re-exported as part of the sub-systems like AI servers or AI hardware,” it said.

Hence, Public Investment Bank's top picks are Cloudpoint Technology Bhd and MI Technovation Bhd. 

At 10.29 am, MI Technovation added 3.0 sen to RM1.97 with 193,200 shares traded, while Cloudpoint Technology rose 1.5 sen to 72 sen with 528,500 shares traded. 

-- BERNAMA