US policy reversal to benefit global AI chipmakers

PETALING JAYA: US president Donald Trump’s decision to rescind and revise the Biden-era artificial intelligence (AI) chip export curbs signals a positive shift in global semiconductor market.

The move is expected to lift sentiment for global AI chipmakers such as Nvidia Corp and Advanced Micro Devices Inc.

Kenanga Research viewed this as a near term catalyst for Nationgate Holdings Bhd, which has seen its share price decline by 43% since the AI diffusion rule was announced in January.

“Although the policy reversal has yet to be finalised, the news flow is expected to buoy sentiment across the global semiconductor space, particularly among AI chipmakers.

“Should the curbs be relaxed or revised, Nationgate stands to benefit from improved visibility and demand recovery in AI-related module assembly.

“In addition, we also do not rule out the possibility of government-to-government agreements under the upcoming revised AI diffusion rules,” the research house said in a report yesterday.

According to Reuters, the Trump administration is planning to rescind and revise the Biden-era export restrictions on advanced AI chips, as confirmed by a US Department of Commerce spokesperson on Wednesday.

The existing rules, aimed at curbing China’s access to high-end AI computing power, divided the world into strategic tiers to preserve technological advantages for the United States and its allies.

“In a related development, Reuters also reported that Trump is expected to announce a decision to ease AI chip export restrictions to select Gulf nations during his visit to the Middle East from May 13 to 16.

“Notably, the United Arab Emirates, currently under Tier 2 of the US AI diffusion framework, faces limits on its imports of advanced processors,” it said.

Kenanga Research maintained a “neutral” outlook for the technology sector with Kelington Group Bhd as its sector’s sole top pick, given the company is supported by robust earnings visibility and driven by its strong order and tender books.

The research house said while it maintains several “outperform” calls under its coverage, near-term uncertainties stemming from Trump’s tariff threats and supply chain disruption had kept these stocks within a volatile trading range.

“As such, we recommend aggressive investors to adopt a more trading-oriented approach amid the prevailing uncertainties,” it added.