Japan is seeking to expand its investments in Malaysia’s digital industry, including niche areas such as high-tech semiconductor products and data centres. The move reflects growing interest in leveraging Japanese technology to support advanced applications and strengthen Malaysia’s role in regional supply chains.
Masuo Kuremura, special advisor to the minister for regional head, Asia-Pacific at Japan’s Ministry of Economy, Trade and Industry (Meti), said Japan plans to boost investments in Malaysia by introducing advanced applications powered by Japanese technology. These collaborations are expected to focus on sectors such as artificial intelligence (AI), biotechnology, and food innovation.
“We will promote collaboration between Japanese and Malaysian companies, utilising Japanese technology in the digital industry for applications in AI, biotechnology and food sectors to enhance investment,” he told Bernama during the Malaysia-Japan Fast Track Pitch held recently.
Kuremura added that Japanese investment in Malaysia’s retail sector is also expected to rise in 2026. He noted that Malaysia plays a pivotal role in Japan’s supply chain, supported by its strong manufacturing capabilities in semiconductors, chip products, and the automotive industry.
He cited the long-standing collaboration between Perodua and Daihatsu as an example of successful industrial cooperation, which has helped position Malaysia as a reliable supplier within the automotive ecosystem. Japanese companies, he said, are keen to continue providing innovative solutions to enhance Malaysia’s manufacturing capacity and strengthen its position in global supply chains.
Several major Japanese semiconductor companies already operating in Malaysia — including Renesas Electronics, ROHM Co Ltd, Murata Manufacturing, Toshiba Corporation, Shin-Etsu Chemical and Sumitomo Electric Industries — play key roles in supporting the chip ecosystem, particularly in specialised semiconductor components.
Kuremura noted that Malaysia is Japan’s fourth-largest investment destination within Asean and serves as an important base for semiconductor-related investments. Singapore remains Japan’s top investment destination in the region, largely driven by financial services, while Thailand and Indonesia rank second and third, with investments mainly focused on the automotive sector.
Japan is also introducing a matching platform to encourage investment collaboration between start-ups in Japan and Asean. Within the region, Japan is focusing on four key pillars — strengthening supply chain resilience, driving innovation, advancing digitalisation, and supporting energy transition.
He added that Japan continues to play a significant role in the region through initiatives such as the Asia Zero Emission Community (Azec), which promotes energy transition and decarbonisation efforts across Asia. Azec partner countries include Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore and Thailand.
Beyond digital investments, Japan is also exploring opportunities in critical rare earth supply chains, which are essential for advanced materials used in automotive and aerospace industries. In computing resources, Kuremura said Japan is looking to share technology developed in Kyushu — known as Japan’s “Silicon Island” — with Asean companies to support AI and advanced computing development.
He noted that major chip manufacturers such as Japan Advanced Semiconductor Manufacturing (JASM) and Taiwan Semiconductor Manufacturing Company (TSMC), which has anchored a semiconductor hub in Kyushu, could help provide infrastructure to promote AI and high-performance computing in the region.
According to the Department of Statistics Malaysia, Japan ranked among the top three sources of foreign direct investment (FDI) in Malaysia in the fourth quarter of 2025, with RM103.8 billion recorded.
