Cybersecurity is becoming a critical competitive factor for Malaysia’s technology hardware sector, as global semiconductor companies increasingly prioritise supply chain resilience and cyber risk management when selecting suppliers, according to Kenanga Research.
The research house said cybersecurity is no longer viewed solely as a regulatory compliance issue but is emerging as a core supplier qualification criterion alongside quality, cost, delivery performance and manufacturing capability.
This shift comes amid a growing number of cyberattacks targeting manufacturers and broader industry efforts to strengthen supply chain security through initiatives such as the Semiconductor Manufacturing Cybersecurity Consortium (SMCC).
Kenanga’s channel checks with management teams of selected Penang-based technology companies serving multinational semiconductor customers found that cybersecurity has become a mandatory prerequisite during supplier qualification processes.
The research noted that multinational customers are now routinely assessing suppliers’ cybersecurity capabilities during periodic audits, alongside traditional evaluations of technical expertise and manufacturing excellence.
As a result, Malaysian technology manufacturers are expected to demonstrate stronger cybersecurity governance, recognised certifications such as ISO 27001, and comprehensive cyber risk management frameworks to remain competitive within the global semiconductor supply chain.
Kenanga believes the evolving requirements will drive sustained investment in cybersecurity capabilities across the local technology sector, creating opportunities for both hardware manufacturers and cybersecurity service providers.
Among companies under its coverage, the research house identified LGMS Berhad as the key beneficiary of the trend.
Kenanga maintained its Outperform recommendation on LGMS with a target price of 58 sen, citing the company’s position as Malaysia’s leading pure-play cybersecurity specialist.
LGMS provides a range of cybersecurity services, including security assessments, penetration testing, managed security services and regulatory compliance solutions, positioning it to benefit from rising demand as semiconductor manufacturers strengthen their cyber defences.
