Malaysia contributes around 7% to the overall global semiconductor market volumes, ranking as the world’s sixth-largest semiconductor exporter.
ELECTRICAL and electronics (E&E) products remain Malaysia’s export strength, contributing to around 40% of Malaysia’s total exports.
In 2024, the United States was Malaysia’s largest export market for E&E products, representing about 20% of total exports of such products.
In addition to being a significant player in the global semiconductor supply chain, Malaysia contributes around 7% to the overall global semiconductor market volumes, ranking as the world’s sixth-largest semiconductor exporter.
As of August 2025, imports of semiconductor by the United States remain exempt from being levied, including from Malaysia, subject to ongoing US national security investigations.
But any removal of this exemption could result in repercussions, reduce competitiveness and strain sectors that are closely integrated with the US supply chains.
Malaysia needs to implement swift and proactive measures to mitigate the effects of the US tariff impact along with the possible imposition of levies on semiconductor and retaliatory policy responses.
Existing measures and initiatives outlined should be expedited to strengthen economic growth and further enhance trade performance.
The government through various policies, including the National Semiconductor Strategy and the New Industrial Master Plan 2030 (NIMP 2030), would continue to strengthen the resiliency of local industries.
Initiatives under these policies would spur significant investments in workforce development, research and development and higher-value segments.
Programmes outlined under the initiatives, including the NIMP Industrial Development Fund, Market Development Grant and Services Export Funds would facilitate market access and further support domestic companies to transform operations by enhancing efficiency, embracing automation and boosting overall productivity.
Because of its diversified and strong economic fundamentals, Malaysia remains well-positioned as a preferred investment destination.
As such, Malaysia may benefit from trade diversion as foreign companies pursue alternative manufacturing hubs beyond China.
Initiatives such as the Johor-Singapore Special Economic Zone could further attract investors seeking stable and competitive environments.
Furthermore, Malaysia continues to broaden export markets by prioritising high-growth regions and leveraging existing free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.
Malaysia’s market diversification strategy focuses on reducing reliance on traditional trading partners by expanding its export footprint into emerging and high-growth markets across Asia, the Middle East, Africa and Latin America.
Through active participation in regional and multilateral trade agreements, Malaysia aims to enhance market access and integrate deeper into global value chains.
The government emphasises the National Trade Blueprint in supporting exporters, particularly small and medium enterprises, by facilitating trade missions, offering market intelligence and promoting high-value industries such as E&E, halal products and green technology.
