KUCHING: US’ tariffs will not directly impact the local semiconductor industry but analysts warned that if US extends the list of countries that may be subject to the tariff (to include Malaysia), it may have a more damaging effect.

To note, last year, Malaysia was one of 16 countries listed by US as the causes of US’ significant trade deficit in 2016.

Nevertheless, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) highlighted that for now, there will be no direct impact for the local semiconductor industry players.

“Nonetheless, the local industry players sell their products/services (back-end) to China clienteles. As such, should there be any reduction in demand from the US which impacted the China clienteles, it would in turn translate to lower volume order for the local players,” it said.

It noted that some of the local semiconductor companies indicate that business is as usual and there has yet been any downward revision in volume order.

On another note, according to US trade representative Robert Lightizer, the new measures against China will primarily target certain products in the technology sector where Beijing holds an advantage over Washington, and it will include restrictions on Chinese acquisitions and investments.

“Given that the tariff will be targeted, the impact might not be widespread,” MIDF Research said.

“However, should the US extends the list of countries that may be subject to the tariff (to include Malaysia), it may have a more damaging effect,” it added.