“We built a strong ecosystem around the semiconductor industry and it has been a major part of our exports,” Tengku Zafrul said in an interview with Bloomberg today.
Companies based in Malaysia hadn’t seen major disruptions in the sector during the last change in US leadership “and I don’t foresee that continuing to change when there is a new – if there is a new policy change in the US administration,” he said.
Southeast Asia, including Malaysia, benefitted from geopolitical tensions that spurred more investments in the region, the minister said, adding that the country continues to engage both the US and China.
Investors are flocking to Malaysia once again amid a booming artificial intelligence (AI) sector and improving political stability.
After a rapid turnover of leaders, Prime Minister Anwar Ibrahim has consolidated his power, enacted reforms and launched economic plans to improve the country’s outlook since coming into power in November 2022.
Tech giants including Microsoft, Nvidia, and Amazon.com Inc have pledged to invest billions of dollars in the country’s infrastructure as Anwar bets on the country’s non-aligned stance and resilient economy to weather it through any geopolitical storm.
The country’s semiconductor sector, in particular, is set to benefit regardless of who wins in the upcoming US elections, due to supply chain shifts and trade diversions, according to CIMB Group Holdings Bhd economist Vincent Loo in a research note dated Sept 6.
Such products make up the lion’s share of Malaysia’s overseas shipments, accounting for 53% of exports to the US and 36% to China in the first five months of the year, he said.
Meanwhile, international funds turned net buyers of Malaysian equities in 2024, while Kuala Lumpur became the busiest location for listings in Southeast Asia.
The ringgit has recovered from a 26-year low it reached against the dollar in February, emerging as the top gainer across developing markets this year.
Tengku Zafrul said that Malaysia is encouraging companies to invest as it focuses on five sectors: electrical and electronics, digital economy, chemical and petrochemical, healthcare, and aerospace.
“The nation is seeking green and digital investments too,” he added.