Malaysia, Taiwan Trade Ties Remain Intact - APEX Securities

KUALA LUMPUR, Aug 20 (Bernama) — Malaysia’s bilateral trade relations with Taiwan are not expected to be materially affected by the latest development at this juncture, according to APEX Securities.

Malaysia has a deep trade relationship with Taiwan, the nation’s fifth-largest trading partner after Singapore, China, the United States and the European Union in the first half of 2026 (1H 2026).

Bilateral trade with Taiwan rose sharply by 34.7 per cent year-on-year (y-o-y) to RM147.8 billion in 1H 2026, equivalent to 8.2 per cent of Malaysia’s total trade.

More importantly, Malaysia and Taiwan are closely integrated within the global semiconductor value chain, with Malaysia having established strong capabilities in semiconductor assembly, testing and packaging, accounting for around 13 per cent of the global market.

In a research note today, APEX Securities said it expects bilateral trade and investment to remain intact, including in advanced packaging and testing facilities, and, potentially, in higher-value-added segments, as companies expand capacity across the broader semiconductor supply chain.

“Furthermore, given the highly integrated and specialised nature of semiconductor supply chains, we see limited scope for businesses to quickly shift to alternative suppliers in response to political developments,” said APEX Securities.

Malaysia benefits from Taiwanese technology, capital and supply-chain relationships, while Taiwanese companies benefit from Malaysia’s skilled workforce, infrastructure, established semiconductor ecosystem and strategic access to regional markets.

Back-of-the-envelope calculations suggest that electrical and electronics (E&E) products accounted for as much as 65.9 per cent of Malaysia’s exports to Taiwan in the first quarter of 2026 (1Q 2026).

“This deep integration should limit the risk of near-term disruptions to bilateral trade,” it said.

Overall, APEX Securities believes Malaysia’s economic outlook remains intact for now and maintains its full-year 2026 gross domestic product (GDP) growth forecast at five per cent y-o-y, at the upper end of Bank Negara Malaysia’s official forecast range of 4.0-5.0 per cent.

In particular, the recent strength in E&E exports and artificial intelligence-related investment should continue to be supported by the global technology upcycle and ongoing supply-chain diversification.

-- BERNAMA