Malaysia is well-positioned to benefit from AI semiconductor boom through advanced packaging and supply-chain shift

MALAYSIA: Malaysia is in a strong position to benefit from the global artificial intelligence (AI) semiconductor boom, helped by rising electronics exports, new investments and changes in global supply chains, according to Apex Securities Bhd.

The research house said the trend is already showing up in the country’s electrical and electronics (E&E) export figures. E&E exports climbed 39.5% year-on-year in January 2026, supported by stronger semiconductor investments under Malaysia’s National Semiconductor Strategy.

The report, released on July 2, also said companies involved in advanced packaging, semiconductor equipment and AI infrastructure stand to gain as chipmakers expand production to meet rising AI demand.

Malaysia strengthens its role in the chip industry

According to Apex Securities, Malaysia now handles about 13% of global semiconductor assembly, testing and packaging work, giving the country an important role in the chip supply chain as manufacturers spread production across more locations.

The research house said the National Semiconductor Strategy has already attracted more than RM63 billion in approved semiconductor-related investments. The plan aims to double Malaysia’s share of the global semiconductor market from about 7% to 14% by 2029.

It also pointed to listed companies under its coverage, including Frontken, Mi Technovation, ViTrox, EG Industries, Inari, QES Group and Wentel, as being well-placed to benefit from the trend.

Investors urged to stay selective

Despite keeping an “overweight” rating on Malaysia’s technology sector, Apex Securities said investors shouldn’t expect every technology company to perform equally well.

The company said much of the sector has already enjoyed strong gains. Future returns are expected to come from companies with solid earnings prospects, healthy order books and a proven ability to deliver results, rather than the sector as a whole.

AI demand is creating new opportunities

The AI boom has fuelled demand for advanced chips and the equipment needed to produce them. Countries with established semiconductor industries are seeing renewed interest from global manufacturers looking to strengthen supply chains and reduce concentration in a single market.

Malaysia’s long-standing strength in chip assembly, testing and packaging places it in a favourable position if investment momentum continues, according to Apex Securities.

The Star, citing Apex Securities as reported by Bernama, indicates that strong exports and sustained investment are giving Malaysia another chance to strengthen its position in the global semiconductor industry.

The opportunity is encouraging, but long-term success will still depend on execution. Turning investment into skilled jobs, stronger local companies, and lasting industry growth will make a difference far more than short-term excitement around AI.