Tension between Beijing and Washington over access to technology has prompted many companies to open factories in south-east Asia. Mercedes Ruehl, Financial Times
As companies around the world look for a back-up to China to protect themselves from geopolitical disruptions — a strategy known as China plus one — Malaysia is becoming a surprise investment destination.
It has a 50-year history in the “back end” of the semiconductor manufacturing supply chain: packaging, assembling, and testing chips. But it has ambitions to move up to the front end of a $520bn global industry that powers everything from televisions to smartphones and electric vehicles. That includes higher-value activities such as wafer fabrication and integrated circuit design.
The broadening US curbs on Chinese technology, especially for chipmaking, are a key reason for neutral Malaysia’s appeal, say industry groups. America is jostling with China for global technology supremacy and has enlisted support from allies in Europe and Asia as it restricts sales of the most advanced chips and manufacturing equipment to its geopolitical rival.
Investment is booming. The state attracted RM60.1bn ($12.8bn) in foreign direct investment in 2023, more than the total it received from 2013 to 2020 combined.
Developing Malaysia’s semiconductor industry and workforce into this higher-value manufacturing is a “critical goal,” says Prime Minister Anwar Ibrahim in an interview with the Financial Times.
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