US tech firms in Malaysia see slower sales growth in 08

UPDATE 1-US tech firms in Malaysia see slower sales growth in 08

Thu Jul 3, 2008 8:04am BST

KUALA LUMPUR, July 3 (Reuters) - Sales by U.S. tech firms from factories in Malaysia are expected to rise 0.4 percent to 74.1 billion Malaysian ringgit ($22.65 billion) this year, slowing from growth of 7.1 percent in 2007, an industry body said on Thursday.

Rising fuel and food prices are expected to crimp global demand for consumer electronics products such as cell phones, MP3 players and personal computers, the Malaysian American Electronics Industry (MAEI) said.

Sales totalled 73.8 billion ringgit last year.

Capital investment by U.S. electronics manufacturers in Malaysia is projected to drop 10.6 percent to 2.44 billion ringgit this year, the MAEI said.

Sales from MAEI's members, who include Motorola MOT.M, Dell (DELL.O: Quote, Profile, Research), and Intel(INTC.O: Quote, Profile, Research), account for about 16 percent of Malaysia's total exports of manufactured goods.

"2008 will be a challenging year in view of the slowing global economy, in particular the United States, with rising costs and inflation," MAEI chairman Wong Siew Hai said.

"During the second half of the year, if things change then it (sales growth) could go down lower than the numbers that we are projecting," he told reporters.

But Wong said growing political uncertainties in Malaysia had yet to cause any serious concerns for the committee's 17 member companies.

"So far, we have not seen any impact on investment," he said.

"As far as doing business here is concerned, there is a consistency in policy. Policy changes are not there," he added.

The governing coalition led by Prime Minister Abdullah Ahmad Badawi suffered its worst-ever electoral setback in a March 8 general election, conceding its traditional two-thirds majority in parliament and control of five of the country's 13 states.

The opposition, led by former prime minister Anwar Ibrahim, has said it had won enough defections to topple the government by mid-September. (Reporting by Soo Ai Peng; Editing by Kim Coghill)