Malaysia Boosts Semiconductor Industry to Capitalize on EV Market Growth

Malaysia's Minister of International Trade and Industry, Zafrul Aziz, recently underscored the pivotal role of semiconductors in revolutionizing both conventional car manufacturing and the burgeoning electric vehicle (EV) sector. In an exclusive interview with CNBC's "Squawk Box Asia," Aziz highlighted the increasing demand for components sourced from Malaysia by EV manufacturers, signaling a significant shift in supply chain dynamics.

To solidify Malaysia's position as a key player in the EV ecosystem, the country has launched a new national semiconductor taskforce. This initiative aims to elevate Malaysia's status within the global semiconductor value chain. Aziz outlined Malaysia's ambition to attract major EV manufacturers to expand their operations in the country, citing Tesla's establishment of a regional headquarters and the presence of Malaysian companies in Tesla's supply chain as significant milestones. 

Aziz emphasized the significance of semiconductor manufacturing, particularly in the context of EV production. Unlike conventional vehicles, EVs demand a substantially larger number of chips, up to 15,000 per vehicle, underscoring Malaysia's strategic importance in meeting this demand. The country's semiconductor industry not only contributes significantly to its GDP and exports but also plays a critical role in driving economic growth. 

In line with its objectives, Malaysia is prioritizing the development of the "front end" of the chips industry, focusing on wafer fabrication and circuit engraving. The establishment of the national semiconductor strategic taskforce underscores Malaysia's commitment to nurturing its semiconductor ecosystem and attracting strategic investments. Aziz highlighted the importance of addressing talent shortages in the electrical and electronics engineering field, noting the need for 50,000 engineers annually. 

Despite the talent shortage, Aziz expressed confidence in Malaysia's ability to advance its semiconductor industry, citing its strong foundation built over five decades. The country's semiconductor sector has evolved since its inception in the early 1970s, providing a robust platform for future growth and innovation. As Malaysia positions itself to capitalize on the EV market boom, its semiconductor industry is poised to play a pivotal role in driving economic prosperity and technological advancement.