Kuala Lumpur, Malaysia – 2018/01/24: A foreigner poses with the Malaysian flag in the background. Kuala Lumpur or commonly known as KL is the national capital of Malaysia and the fastest growing metropolitan area in Southeast Asia. The city is also world-famous for tourism and shopping. Kuala Lumpur has excellent public transportation, making it easy for people to get around the city. (Photo by Faris Hadziq/SOPA Images/LightRocket via Getty Images)
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Malaysia’s second finance minister said Malaysia is not worried about competition from China or the United States as it moves into high-end semiconductor manufacturing.
“The semiconductor space is in an upgrade cycle right now,” Amir Hamzah Azizan told CNBC’s Karen Tso at the International Monetary Fund’s spring meetings in Washington on Wednesday. Malaysia will be the beneficiary.
He also pointed out that Malaysia does not consider China as a competitor in this industry, and China is Malaysia’s largest trading partner today.
“I think the reality is that there’s going to be enough growth. So everybody’s going to get something out of this,” he said.
Amir Hamza explained that if anything, recent geopolitical tensions have shown that it is critical to keep supply chains strong.
“We’re seeing a lot of end users now diversifying their supply chains. Really, our focus is on delivering very dynamic, strong supply chain connectivity and making sure we can build on that.”
Compete with the United States
Malaysia seems to benefit from Sino-US trade tensions have prompted companies to diversify their semiconductor businesses. The country is now focused on moving from back-end production in the wafer supply chain to upstream in the value chain.
The Malaysian Investment Development Authority stated in the report that the country accounts for 13% of the global chip packaging, assembly and testing services market. Report on February 18.The government is also strengthening the development of its semiconductor ecosystem and attract investment.
As the U.S. ramps up chip investment, Amir Hamzah Highlight that Malaysia offers a different value proposition.
“I think where Malaysia competes, we’re not going to go straight into the tail end of the premium competition, the U.S. will probably bring all the parts,” he said. “I think that’s a big challenge for us.”
He said the country was working to “extend the value chain” to attract new businesses and strengthen its position in the sector.
“Ultimately,” the minister added, “it’s about economies of scale.”
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