KUALA LUMPUR: Diversification of operations and markets has become essential for businesses in Malaysia to stay competitive, said Malaysian Investment Development Authority (MIDA) chief executive officer (CEO) Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid.
He said that for the survival of many industries, diversification has become an important element for business survival.
"In the solar sector, for instance, United States (US) tariffs imposed on producers from Malaysia, Thailand, Vietnam, and Cambodia will significantly increase the cost of exports to the US.
"As a result, companies within these countries, which account for approximately 60 per cent of solar exports to the US, must diversify their markets to remain competitive. The pressure is on them to seek new markets, including within the BRICS nations,” said Sikh Shamsul.
He said this during the "Budget Insights Forum: Moving Towards 2025”, which was organised by MIDA and the Malaysian Institute of Economic Research (MIER) at MIDA Sentral, here today.
The CEO highlighted that similarly, the global semiconductor industry is facing challenges due to the latest US restrictions on Chinese semiconductor companies and their supply chains.
"This provides an opportunity for Malaysia, as we are already seeing interest from Chinese companies in the semiconductor field. These companies, including semiconductor manufacturers, equipment suppliers, and material makers, are looking to diversify their operations away from China to reduce their exposure to geopolitical risks.
"Malaysia, with its favourable investment environment, is seen as an attractive destination for these companies to establish operations that do not involve Chinese equity ownership, thereby mitigating risks while still accessing global markets,” Sikh Shamsul said.
In light of these shifts, he said that diversification is a key strategy for Malaysia’s continued economic growth.
"The Malaysian government is focusing on diversifying investments, particularly in high-growth sectors like semiconductors and electric vehicles (EVs), and exploring new markets to reduce dependency on traditional trade partners,” Sikh Shamsul noted. - Bernama
