Semiconductor industry urged to brace for challenges ahead

MALAYSIA needs to prepare its strategic semiconductor sector for the challenges ahead, especially if the United States (US) decides to impose import tariffs on its components, said Second Finance Minister Senator Datuk Seri Amir Hamzah Azizan.

For now, the threat of tariffs is abated namely because the semiconductor industry has a "narrow supply chain" (specialised area), and many of the multinationals in the country, are from the west and dependent on such material, he said.

Also, many of the multinationals have reinvested in the US, so there is an exemption accorded to them for now.

"Malaysia also has established an important eco-system for the industry, which is wired up to the global supply chain," he said.

He also urged industry players to improve their value in the global marketplace, by upskilling and innovating their products and services.

To cope with the adverse geo-politics amid global economic uncertainties, Amir Hamzah said that it is important that the country retains a strong eco-system for its semiconductors, a strong talent pool and a strong innovative culture.

He was speaking after a dialogue with local semiconductor company heads at the Broadcom Limited Global Distribution warehouse in the Batu Kawan Industrial Zone.

The gathering was held for the ministry to gain direct feedback from the industry stakeholders ahead of the tabling of next year's fiscal Budget on October 10.

Amir Hamzah said that the semiconductor sector or electronics and electrical (E & E), is an important component to the country's economic eco-system.

It contributes 40% to the overall exports of the country.

Therefore, the sector is critical and would receive the utmost attention during the Budget, said the Penang-born minister.

Earlier in his opening remarks to industry players, Amir Hamzah said that the role of the government is to facilitate the growth of eco-systems and businesses, hence the budget will be tailored to act as a stimulus to the economy.

Semiconductors are the largest sector of export for the country, he said.

Moving ahead, Amir Hamzah said that he wants a full commitment from the industry to work closely with the government.

"Not just ask but commit to actually work together with the government to make this a better country, and develop along the way, because a much deeper and stronger system can help you in the journey ahead." - September 23, 2025.