CIMB Predicts Minimal Middle East War Impact on Southeast Asia Tech Sector Amid AI-Driven Growth

CIMB Securities reports minimal direct impact from the Middle East war on the regional technology sector due to limited semiconductor manufacturing in the area.

This resilience allows Southeast Asian tech firms to focus on recovery amid global supply chain shifts.

Indirect Risks from Geopolitical Tensions

However, Israel serves as a vital semiconductor R&D hub, where escalations could disrupt innovation pipelines for major global players.

Prolonged conflict may drive up energy and logistics costs, potentially affecting semiconductor fabrication processes.

South Korea depends on Middle Eastern supplies like helium and bromine for chips, but alternatives exist to cushion blows.

AI Infrastructure Vulnerabilities Emerge

Drone strikes damaging AWS data centers raise alarms for cloud providers investing in regional AI projects.

Any slowdown in AI data center buildouts could weaken demand for high-performance AI chips.

Malaysia's Tech Sector Poised for Rebound

CIMB upholds a Neutral rating on Malaysia's technology sector, forecasting 9% average revenue growth for 2026-2027.

Key sub-sectors including OSAT, EMS, and ATE are set to deliver a robust 25% two-year core net profit CAGR.