Malaysia Moves to Diversify Beyond Semiconductors Amid Global Downturn Risks

Malaysia is preparing for a possible soft patch in the global chip cycle by widening how it grows, not by walking away from electronics. Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told the Dewan Rakyat that the government will diversify growth sources and the electrical and electronics (E&E) value chain so the country is less exposed if semiconductor demand cools.

Higher-value chips, stronger local chains

Johari said the response rests on the New Industrial Master Plan 2030 (NIMP 2030) and the National Semiconductor Strategy (NSS). The focus is on technology-intensive work such as integrated circuit design and advanced packaging, rather than staying stuck at the lower end of assembly. He framed that shift as a way to keep E&E relevant while lifting wages and capability at home.

He was answering Muhammad Fawwaz Mohamad Jan (PN-Permatang Pauh), who asked how Malaysia would cope with a downturn in the global semiconductor cycle. Johari pointed to the breadth of NIMP 2030: 21 sectors, including services, contributed RM897 billion in 2025. The plan is meant to raise economic complexity, push more high-value activity and create jobs beyond E&E alone.

"Firstly, we will strengthen and diversify the E&E value chain... focusing on high value-added and technology-intensive activities, such as integrated circuit design and advanced packaging," Johari said.

New export markets and local capability

Through MATRADE, MITI is also hunting demand outside the usual destinations. Johari named Central Asia, Africa and Latin America as markets where Malaysian exporters can build more balance if traditional buyers slow. On a follow-up about high-value exports and local technology strength, he said the government has held several rounds of engagement with domestic firms and must take firm steps to protect long-term resilience.

• Deepen IC design and advanced packaging under NIMP 2030 and the NSS
• Build domestic supply chains so less value leaks offshore
• Open non-traditional export routes via MATRADE
• Use services and other NIMP sectors to offset chip-cycle swings

What this means for Malaysian readers

For workers and SMEs tied to Penang, Kulim, Johor and the Klang Valley electronics belt, the message is not panic — it is upgrade. Firms that can move into design, materials, tooling, testing or specialised packaging sit closer to the policy sweet spot. Suppliers outside pure assembly, including software, logistics and precision engineering, may find more room as the government talks up domestic chains. Exporters should watch MATRADE programmes aimed at newer markets, because diversification only works if smaller firms can actually reach buyers there. None of this removes near-term chip volatility, but it signals Putrajaya wants Malaysia's growth story to rest on more than one global cycle.

Source: Business Today — Malaysia To Diversify Growth Beyond Semiconductors Amid Global Downturn Risks