Malaysia’s Silicon Valley sees misfortune as virus outbreak disrupts China suppliers

Malaysia’s Silicon Valley sees misfortune as virus outbreak disrupts China suppliers

Tech firms in Malaysia’s one-time Silicon Valley of the East saw its fortune flip after the coronavirus outbreak disrupted supply lines from China. This came after Malaysia found profitable circumstances last year when customers sought refuge after fleeing from China that was hit by civil protests and a prolonged trade war with the U.S.

Among these tech firms was Pentamaster Corp Bh, which saw its shares doubled after a steep gain in sales. However, with parts production facilities halting operations to slow the virus in early 2020, the Malaysian semiconductor manufacturer had to resort to import parts from Japan, South Korea, Germany, and Italy which proved to be a costly alternative.

The firm has since lowered its 2020 revenue growth outlook to flat from double digits, while its stock has fallen more than 10% since China in late January locked down the virus epicenter, Wuhan.

Pentamaster’s situation is among the many other tech firms across Malaysia that have lost business due to the outbreak.

Inbound investment reached record high last year. This year, however, the goal is trimmed to one-third of the previous target, at about $1.2 billion – though that is due to the life cycles of investments rather than the virus, the state government said.