KUALA LUMPUR: Malaysia, as a middle power, can play its role in global supply chain security amid the US-China trade stand-off, particularly via its electrical and electronics and renewable energy (RE) sectors.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said, that globally, investors in industries such as electric vehicles (EVs) and solar power are focused on securing sensitive supply chains.
“The emergence of competing supply chains, and the United States’ and China’s efforts to decouple from each other’s economies, has reshaped the dynamics of both international trade and investments,” he said in his keynote address at the Institute of Strategic and International Studies’ PRAXIS 2024 policy conference yesterday.
Tengku Zafrul said understanding the clear divisions within the global tech ecosystem has been crucial in positioning Malaysia as a preferred investment destination, particularly for semiconductors.
“China’s ‘Made in China 2025’ initiative seeks to establish dominance in crucial technologies such as artificial intelligence AI, robotics, RE, EVs, aerospace and biotechnology. In response, the United States has restricted critical exports and domestic innovation investments through initiatives such as the CHIPs Act.
“As a result, many investors are seeking diversification across regions and sectors, as a risk-mitigation measure. Security concerns and over-reliance have led both economies and their regional partners to invest more in separate, rival tech supply chains,” he said.
Tengku Zafrul said that at the heart of today’s “Tech Cold War” lies a battle over the semiconductor supply chain, and Malaysia’s 50-year-old semiconductor sector places the country in an excellent position to reap such opportunities.
“This is why we introduced the National Semiconductor Strategy (NSS) to move our semiconductor producers up the global value chain to export more higher-value products.
“We have already welcomed global investors such as Infineon, Intel and Texas Instruments who have increased their investments in Malaysia, due to our agile tech supply chains. Indeed, as technology continues to evolve, investors are also considering the transformative potential of emerging technologies such as generative AI,” he said.
To that end, Tengku Zafrul said, Malaysia is also actively courting investments in related assets such as robotics, AI-powered logistics suppliers and industrial real estate – in short, hardware, software and applications across the AI ecosystem – to help global investors mitigate risks.
“Indeed, the semiconductor industry is the backbone of today’s biggest technologies, including AI, EVs and factory automation. It is also pivotal in securing economic prosperity and national security for tech superpowers such as China and the United States, especially as Taiwan still dominates semiconductor manufacturing worldwide,” he said.
According to the minister, analysts have estimated that US initiatives, such as the CHIPS Act, may inject roughly US$100bil into the semiconductor industry across the United States, Europe and Asia, with Malaysia having the industrial capacity, track record and stability to reap opportunities successfully.
“Malaysia can truly become a ‘middle-power broker’ to support the security of the global tech supply chain.
“This is why the NSS has earmarked over RM25bil over the next decade to strengthen and upscale Malaysia’s semiconductor sector through talent development, targeted initiatives for local companies, and incentives to promote investment in high-value-added front-end activity.
“Aside from our efforts on developing talent, Malaysia must also apply data-driven solutions. Hence, the continued need for strategic, deliberate and conscious action by policymakers like the Investment, Trade and Industry Ministry,” he said.
— BERNAMA
