1. Malaysia is working to strengthen its role in the global semiconductor sector by diversifying supply chains and maintaining investor confidence amid trade uncertainties. The country’s approach is being shaped by the National Semiconductor Strategy (NSS), which aims to enhance resilience in an industry increasingly influenced by geopolitical and economic shifts.
2. The NSS reflects Malaysia’s ambition to position itself, alongside neighbouring economies such as Singapore and Vietnam, as a vital link in the global technology supply chain. The emphasis is on creating a more robust and flexible framework for semiconductor production and trade, moving away from the older reliance on single-sourced operations.
3. This shift mirrors broader industry trends, where the focus has turned from efficiency alone to resilience, as global players seek multiple supply chain options to guard against disruptions. Companies are increasingly investing in local talent, advanced manufacturing and technology to strengthen their long-term competitiveness.
4. Central to Malaysia’s strategy is the idea of transitioning from the “just in time” production model, which prioritised lean efficiency, to the “just in case” model, which prioritises security and continuity of supply. This approach is increasingly important as international companies reassess their operations in light of rising protectionist measures and the need to secure critical technology inputs.
5. The ongoing trade policy developments in the United States add further urgency to these efforts. The US government is currently conducting an investigation under Section 232 of the Trade Expansion Act of 1962, which could result in new tariffs on semiconductor and pharmaceutical products. The findings of this investigation are expected by the end of 2025, and the implications for exporters, including Malaysia, could be significant.
6. While current reciprocal tariff rates stand at 19%, semiconductor and related products are exempt. The possible imposition of new tariffs, however, introduces uncertainty for industry players. Businesses are reviewing their sourcing strategies and exploring alternative markets to mitigate potential risks.
7. Semiconductors are particularly vital to Malaysia’s economic and industrial landscape. Exports to the US in this category are valued at around RM56.2 billion (approximately US$12.5 billion), accounting for about 14.5% of the country’s total semiconductor exports. This underscores the importance of safeguarding Malaysia’s role in the global semiconductor supply chain.
8. With semiconductors being integral to advanced manufacturing, digital technologies, and critical sectors such as automotive and electronics, sustaining growth in this industry is both a national and regional priority.
9. The Malaysian government is actively engaging in international trade discussions to mitigate potential risks. It has clarified that Malaysian exports are complementary to US supply chains, rather than in direct competition, and has urged for exemptions to be maintained.
10. This reflects a pragmatic approach to international trade negotiations, with the goal of ensuring continued access to markets while reinforcing Malaysia’s position as a reliable partner in the global technology sector.
11. Beyond external negotiations, domestic engagement also forms a key component of the strategy. The government has built channels for continuous dialogue with stakeholders, including industry associations, investors, and research institutions.
12. These platforms allow for feedback and collaborative responses to emerging challenges, ensuring that policy measures remain relevant and adaptive. By strengthening these links, Malaysia is attempting to create an ecosystem that can respond quickly to shifts in global demand and regulatory conditions.
13. While other sectors, like pharmaceuticals, are strong, semiconductors remain the central focus of Malaysia’s innovation and technology ambitions, and the sector is directly tied to the country’s aspirations to scale up its high-tech capabilities.
14. Looking ahead, Malaysia’s positioning in the semiconductor supply chain will depend on its ability to maintain investor confidence, build resilient infrastructure, and align with global trends in innovation and supply chain security.
NATIONAL SEMICON STRATEGY DRAWS RM54.9B INVESTMENTS IN 1H2025 — MITI
1. The National Semiconductor Strategy (NSS) has attracted RM54.9 billion in investments and established six local integrated circuit design companies in the first half of 2025 (1H2025).
2. The Ministry of Investment, Trade and Industry (Miti) stated in a reply on the Dewan Negara portal Wednesday that the NSS has produced 13,679 engineers and skilled workers, and created 25,430 jobs.
3. Miti also reported that the New Industrial Master Plan 2030 (NIMP 2030) has shown strong development, with value-added in the manufacturing sector rising 3.7% to RM96.9 billion in the first half of this year, compared with RM93.4 billion last year.
4. “Employment increased by 0.9% to 2.85 million workers in the manufacturing sector, from 2.83 million previously, while median wages rose 5.4% to RM2,490 in 2024 from RM2,360 in 2023.
5. “This reflects positive industrial growth, alongside improving job and wage prospects,” Miti said in response to Senator Tan Sri Low Kian Chuan regarding the Madani government’s key economic roadmaps.
6. The ministry also reported that the Green Investment Strategy (GIS) attracted RM25.4 billion in investments and created 9,866 job opportunities in the green sector.
7. “Collectively, these roadmaps have established a coherent, stable policy narrative that aligns industrial, energy, technological innovation and investment priorities.
8. “This consistent policy alignment provides investors with confidence that Malaysia not only has a clear economic vision, but also the capability to implement it effectively,” the ministry said.
Source:
https://opengovasia.com/malaysia-national-semiconductor-strategy-to-secure-global-position/?c=my
https://theedgemalaysia.com/node/785583
