Malaysia says its tech boom will withstand US election ripples
Published Fri, Sep 13, 2024 · 120 PM

MALAYSIA’S goal of boosting investments in its growing technology exports sector is unlikely to be affected by the results of the US presidential election in November, according to Trade and Industry Minister Zafrul Aziz.

“We built a strong ecosystem around the semiconductor industry and it has been a major part of our exports,” he said on Friday (Sep 13).

Companies based in Malaysia had not seen major disruptions in the sector during the last change in US leadership “and 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 said.
South-east Asian countries, including Malaysia, have benefited from geopolitical tensions that spurred more investments in the region, the minister said, adding that the country continues to engage both US and China.

Investors are flocking to Malaysia once again amid a booming artificial intelligence sector and improving political stability.

After a rapid turnover of leaders, Prime Minister Anwar Ibrahim has consolidated his power, enacted reforms and launched economic plans to improve the country’s outlook since coming into power in late 2022.
Tech giants including Microsoft, Nvidia and Amazon.com have pledged to invest billions of dollars in the country’s infrastructure as Anwar bets on the country’s non-aligned stance and resilient economy to weather it through any geopolitical storm.

The country’s semiconductor sector, in particular, is set to benefit regardless who wins in the coming US elections, due to supply chain shifts and trade diversions, according to CIMB Group Holdings economist Vincent Loo in a research note on Sep 6.

Such products make up the lion’s share of Malaysia’s overseas shipments, account for 53 per cent of exports to the US and 36 per cent to China in the first five months of the year, he said.
International funds turned net buyers of Malaysian equities in 2024 while Kuala Lumpur became the busiest location for listings in South-east Asia. The ringgit has recovered from a 26-year low against the US dollar reached in February, emerging as the top gainer across developing markets this year.

Malaysia is encouraging companies to invest as it focuses on five sectors: electrical and electronics, digital economy, chemical and petrochemical, healthcare and aerospace, Zafrul said. BLOOMBERG