KENANGA Research believes cybersecurity is rapidly becoming a critical supplier qualification requirement for Malaysia’s semiconductor and technology hardware industry, rather than merely a regulatory or IT compliance issue.
As cyberattacks on manufacturers increase, multinational chipmakers are demanding stronger cybersecurity standards throughout their supply chains.
The report notes that cybersecurity is now being assessed alongside traditional supplier criteria such as quality, cost, delivery and manufacturing capability.
Malaysian technology companies are increasingly expected to implement recognised cybersecurity frameworks such as ISO 27001, strengthen governance and demonstrate effective cyber risk management to remain competitive.
The semiconductor industry is becoming increasingly digitalised, exposing manufacturers to greater risks such as ransomware, intellectual property theft, operational disruptions and supply-chain attacks.
In response, the Semiconductor Manufacturing Cybersecurity Consortium (SMCC) was established in 2024 to develop common cybersecurity standards, supplier assessment frameworks and industry-wide best practices.
Manufacturing has been the world’s most targeted industry for cyberattacks for five consecutive years, with attacks rising from 23.2% of global incidents in 2021 to 27.7% in 2025.
Kenanga expects cybersecurity to become another competitive differentiator for suppliers serving multinational semiconductor companies.
Firms with strong cybersecurity capabilities are likely to gain more business, while weaker players may struggle to qualify as suppliers.
The research identifies LGMS Berhad as the primary beneficiary of this trend. Rated Outperform with a target price of RM0.58, LGMS is viewed as Malaysia’s leading pure-play cybersecurity specialist and is well positioned to benefit from rising demand for security assessments, penetration testing, managed security services and regulatory compliance.
Kenanga also sees significant room for the company to expand its presence within the semiconductor sector.
Kenanga concludes that cybersecurity is no longer simply an IT function but a strategic business requirement.
As semiconductor customers tighten supplier standards, Malaysian technology companies will need to invest in stronger cybersecurity governance and certifications to remain part of the global supply chain, creating long-term growth opportunities for cybersecurity solution providers, particularly LGMS.—July 31, 2026
Main image: manufacturing-today.com
