Malaysia works hard to expand semiconductor ecosystem

Malaysia needs to broaden its manufacturing ecosystem beyond assembly lines and semiconductors to fully capitalize on foreign investments, towards becoming a more complete manufacturing hub.

According to Ben Simpfendorfer, head of the consultancy Oliver Wyman Forum, Malaysia could explore potential areas such as solar panel manufacturing, battery storage systems, and clean energy products.

Malaysia has to move beyond basic assembly work and set itself up as a complete manufacturing hub, he said, noting that the country shouldn’t be just another stop in the process.

He said that while Malaysia has the opportunity to be a big winner in the reconfiguration of global supply chains, it needs to have a holistic master plan as well as an ecosystem that has both breath and depth.

Malaysia's strength lies in its solid legal framework and robust foreign investment policy incentives. However, the government still has much work to do to strengthen the resilience of its supply chains.

The next stage in the process is to focus on building a comprehensive ecosystem for the semiconductor industry, he stated.

Malaysia is one of the countries that stand to benefit as supply chains are de-risked and Chinese interest grows amid global trade tensions.

Last year, Malaysia crossed a milestone with MYR378.5 billion ($88 billion) in approved investments, the highest in the nation’s history, with key strategic investments coming in from the U.S, Germany, mainland China, Singapore, and Hong Kong.