Malaysia’s tech sector unlikely to be affected by US election results, says minister

MALAYSIA: Malaysia’s technology exports are expected to continue smoothly regardless of the upcoming US election results. Trade and Industry Minister Zafrul Aziz shared this outlook in an interview with Bloomberg Television’s Haidi Stroud-Watts and Shery Ahn.

“We built a strong ecosystem around the semiconductor industry and it has been a major part of our exports,” Minister Zafrul stated on Friday.

According to The Edge Singapore, Minister Zafrul noted that despite the previous change in US leadership, Malaysian companies experienced minimal disruption in this sector. “I don’t foresee that continuing to change when there is a new — if there is a new — policy change in the US administration,” he added.

He also pointed out that Southeast Asia, including Malaysia, has benefited from the geopolitical tensions that have driven increased investments into the region. Malaysia continues to engage with both the US and China, leveraging its strategic position to attract investment.

The country is experiencing a resurgence of investor interest due to a thriving artificial intelligence sector and greater political stability. Since taking office in late 2022, Prime Minister Anwar Ibrahim has implemented reforms and introduced economic plans aimed at improving Malaysia’s economic outlook.

PM Anwar’s efforts have drawn substantial investments from major tech companies such as Microsoft, Nvidia, and Amazon.com, all committing billions to support Malaysia’s infrastructure.

According to CIMB Group Holdings economist Vincent Loo’s observations in a research note dated Sept 6, Malaysia’s semiconductor sector is expected to benefit regardless of the outcome of the upcoming US elections. This is due to shifts in supply chains and trade diversions.

Semiconductor products make up a major portion of Malaysia’s exports, making up 53% of shipments to the US and 36% to China during the first five months of the year, Loo noted.

In 2024, international funds have been increasingly investing in Malaysian equities. Kuala Lumpur has become the busiest centre for listings in South-east Asia. The Malaysian ringgit has also rebounded from a 26-year low against the dollar in February, becoming one of the top performers among developing markets this year.

Malaysia is inviting investments in aerospace, chemicals and petrochemicals, digital economy, electricals and electronics, and healthcare, said Minister Zafrul. He also noted that the country is seeking green and digital investments. /TISG

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