MALAYSIA has called for a significant expansion of Japanese investment in high-value industries, positioning itself as a stable and strategic base in Southeast Asia as global supply chains undergo profound transformation.
Speaking at the New Japan-Malaysia Industrial Cooperation Seminar in Kuala Lumpur, Deputy Investment, Trade and Industry (MITI) Minister Sim Tze Tsin highlighted the urgency of deeper bilateral collaboration in response to rising geopolitical tensions and economic uncertainty.
Addressing Japanese government and industry representatives, including Ambassador Shikata Noriyuki, he described the long-standing partnership as one rooted in trust and mutual growth, underpinned by decades of sustained engagement.
Malaysia has hosted 2,872 manufacturing projects by Japanese investors as of December 2025, amounting to RM107.9 billion in investments and generating more than 347,000 jobs.
Bilateral trade reached RM142.96 billion last year and continues to expand steadily.
Sim said these figures reflect deep industrial integration across sectors such as electronics, machinery, energy and chemicals, but stressed that the evolving global landscape demands a shift in strategy.
“In this ‘polycrisis’ era, efficiency alone is no longer sufficient. Resilience and economic security have become equally critical. Industrial policy must now respond to both market forces and geopolitical realities,” he said.
He positioned Malaysia as a neutral and reliable hub within ASEAN, offering stability, connectivity and improving regulatory efficiency for companies seeking to diversify operations.
Malaysia’s policy direction, anchored by the MADANI Economic Framework and the New Industrial Master Plan 2030, is focused on moving up the value chain into innovation-driven sectors, including semiconductors, advanced materials and digital manufacturing.
Sim noted that Japan has played a foundational role in developing Malaysia’s electronics and semiconductor ecosystem and invited deeper collaboration in emerging areas such as integrated circuit design, advanced packaging and research and development.
He also highlighted opportunities in specialty chemicals, rare earth processing and next-generation materials critical for electric vehicles, aerospace and medical technologies.
Malaysia is seeking partnerships in the midstream and downstream segments of rare earth production, particularly in environmentally sustainable processes.
In the healthcare sector, the country aims to strengthen its position as a global hub for medical device manufacturing, with a focus on higher-value products such as precision instruments, implants and digital health technologies.
Sim said Malaysia is also accelerating its adoption of Industry 4.0 technologies, with a target of establishing 3,000 smart factories by 2030, creating demand for automation, artificial intelligence and industrial Internet of Things solutions.
He added that the government is working to position the country as a regional hub for generative artificial intelligence, opening further avenues for collaboration with Japanese technology firms.
On sustainability, Malaysia is targeting net zero emissions as early as 2050 and is building a comprehensive electric vehicle ecosystem, alongside developing carbon capture, utilisation and storage capabilities.
“These are the industries of tomorrow, and we want to build them together,” he said.
Sim also underscored the importance of strengthening supply chain resilience, noting that recent global disruptions have exposed the limitations of traditional just-in-time models.
“Recent global disruptions have underscored a simple reality: ‘just-in-time’ must now be complemented by ‘just-in-case.’ Malaysia is committed to working with Japan to strengthen supply chain resilience through technology collaboration, talent development and deeper industrial linkages,” he said.
He urged Japanese companies to deepen localisation efforts by sourcing from Malaysian suppliers, investing in local talent and forming long-term partnerships with domestic firms.
Drawing on examples from the automotive sector, he cited collaborations involving national carmakers and Japanese partners as evidence of successful technology transfer and supplier development.
Looking ahead, Sim said Malaysia’s industrial strategy aligns closely with Japan’s economic priorities, particularly in semiconductors, green transformation and economic security.
“The evolving global situation, including the current tensions and economic instability, serves as a stark reminder that stability cannot be taken for granted,” he said. - March 31, 2026
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