Malaysia to boost semiconductor resilience with regional ties

Malaysian Prime Minister Anwar Ibrahim has pledged to fortify the country's semiconductor sector by diversifying partnerships, building local expertise, and deepening ASEAN cooperation.

Malaysia will prioritise resilience in its semiconductor sector by working with trusted partners and strengthening domestic capabilities to guard against global supply chain disruptions and geopolitical tensions, Prime Minister Anwar Ibrahim said on Thursday.

Speaking at the ASEAN Semiconductor Summit 2025, Anwar stressed that the region’s stability and development hinge on collaboration, especially as technology supply chains face increasing uncertainty.

"True supply chain resilience means eliminating weak links, either by producing what we need effectively or securing reliable partnerships to access what lies beyond our domestic capabilities," Anwar said. "In these volatile times, diversifying our options is not just wise, it is essential."

He outlined a shift from a foreign direct investment-first model towards fostering local champions within Malaysia’s well-established semiconductor ecosystem. However, he clarified that this would not deter foreign investors, but rather aim to attract long-term partners committed to knowledge transfer and supply chain strengthening.

"We want long-term collaborators who grow with us, and we will continue to welcome partners who strengthen our supply chains, transfer their knowledge and technologies," Anwar said.

To support this transformation, Malaysia is expanding its pool of skilled engineers to overcome labour shortages in the sector. The country is also contributing to a broader ASEAN-wide strategy that emphasises shared development rather than individual national efforts.

"Malaysia must build on its local strengths to serve a larger regional and global purpose. By strengthening our domestic ecosystem, we are also helping to raise ASEAN's industrial capacity," Anwar said.

The remarks come amid a global race to secure semiconductor supply chains following disruptions caused by the pandemic and intensified competition between major powers. Malaysia is already a key player in the global chip supply chain, accounting for an estimated 13% of global chip testing and packaging capacity, according to data from the Malaysia Semiconductor Industry Association (MSIA).

Anwar’s speech underlines the country's ambition to evolve from a manufacturing hub into a regional innovation leader, while aligning with ASEAN's broader digital and industrial goals.

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