KUALA LUMPUR: Malaysia must diversify its exports and strengthen local supply chains to reduce the risks of relying heavily on electrical and electronics (E&E) products, the Dewan Rakyat was told.
Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the E&E sector accounted for 48.4% of Malaysia’s total exports from January to August this year, making the country vulnerable to fluctuations in global semiconductor demand.
He told the Dewan Rakyat on Monday (Oct 12) that Malaysia exported RM1.6 trillion worth of goods in 2025, of which RM712bil came from E&E products.
Semiconductors, a major component of E&E exports, contributed RM483.6bil, or about 68% of the sector’s exports during the first eight months of this year, he said.
Johari said the semiconductor industry was exposed to global economic conditions, technological changes, supply chain disruptions and geopolitical developments.
“These risks certainly have the potential to cause inventory depletion and output reduction, as well as pressure on E&E exports and the country’s overall export performance,” he said in reply to a question from Muhammad Fawwaz Mohamad Jan (PN-Permatang Pauh).
He said the government was not seeking to reduce the role of E&E and semiconductors, but would manage the risks through three main strategies.
The first was to strengthen and diversify the E&E value chain under the New Industrial Master Plan 2030 and National Semiconductor Strategy, particularly in higher-value activities such as integrated circuit design and advanced packaging.
The second was to expand other high-value industries, including pharmaceuticals, automotive, aerospace, chemicals and petrochemicals, while strengthening domestic supply chains.
“Malaysia would also expand its export markets through the Malaysia External Trade Development Corporation (Matrade), targeting regions such as Central Asia, Africa and Latin America,” he said.
In response to a supplementary question from Datuk Adnan Abu Hassan (BN-Kuala Pilah), Johari said Malaysia needed to reduce its reliance on imported components and materials used to manufacture goods for export.
He said E&E exports totalled RM712bil in 2025, while imports for the sector stood at RM567bil, leaving a trade surplus of RM145bil.
By comparison, non-E&E exports amounted to RM897bil, against imports of RM885bil, giving a surplus of RM12bil.
Johari said the government wanted more local companies, particularly small and medium enterprises, to produce components and semi-finished goods currently sourced from overseas.
“Local players must move beyond basic assembly and testing into advanced packaging to capture more value from the semiconductor industry,” he said.
