Govt To Limit Impact Of US Unilateral Trade Measures On Semiconductor, E&E Sectors - MITI
KUALA LUMPUR, July 21 (Bernama) -- The government will intensify efforts to reduce the impact of unilateral measures by the United States, ensuring that Malaysia remains an attractive investment destination for the semiconductor and electrical and electronics (E&E) sectors.
According to the Ministry of Investment, Trade and Industry (MITI), the government will continue to strengthen trade relations with the US through ongoing engagements at all levels to ensure Malaysia’s industrial interests are understood and taken into account in any trade decisions made by the US.
The ministry said the government has also taken steps to enhance the competitiveness of the industry through the implementation of the National Semiconductor Strategy (NSS), with emphasis on developing a highly skilled workforce, increasing technology transfer, strengthening local companies and expanding participation in the global value chain.
“These efforts are aimed at ensuring Malaysia is not merely an assembly location, but emerges as a technology hub offering higher value-added activities,” the ministry stated on the Parliament’s website today.
MITI was responding to Senator Rita Sarimah Patrick Insol on the government’s assessment of Malaysia’s exposure to unilateral US trade measures affecting the semiconductor and E&E sectors.
The ministry said the government is closely monitoring developments in US unilateral trade policies that could affect the country’s E&E sector, including the semiconductor industry.
MiTI noted that in 2025, E&E products accounted for 62.6 per cent of Malaysia’s total exports to the US.
Among the potential implications of unilateral US tariffs on Malaysia are reduced competitiveness of Malaysian exports in the US market if local products are subjected to additional costs compared with those from competing countries, as well as increased pressure on manufacturers that rely heavily on export markets.
“It is also anticipated that existing investors may relocate their investments to countries that are not subject to US tariffs and offer a more competitive trading environment.
“This could affect employment opportunities and potentially lead to the closure of local companies involved in the export ecosystem and production supply chain serving the US market, as well as impact foreign investment,” it said.
MITI highlighted that these risks remain manageable, given Malaysia’s strong position in the global semiconductor supply chain, which has been developed over more than five decades.
Malaysia is one of the world’s semiconductor hubs, accounting for about 13 per cent of the global market, particularly in semiconductor assembly, testing and packaging.
“If unilateral tariffs are imposed, their impact will not be confined to Malaysian exporters alone, but could also increase the production costs of US companies that rely on semiconductor chips and electronic components supplied from Malaysia.
“Therefore, any disruption to Malaysia’s exports would also have implications for manufacturers and consumers in the US,” said MITI.
-- BERNAMA