TOKYO, May 23 — Malaysia’s vibrant semiconductor industry bolsters its position as a reliable regional partner in manufacturing, trade, and innovation, said Prime Minister Datuk Seri Anwar Ibrahim.

As the world’s sixth-largest exporter of semiconductors, he said Malaysia boasts a robust manufacturing base, particularly in the global electronics and electrical industry.

Speaking at the 29th International Conference on The Future of Asia, Anwar highlighted Malaysia’s appeal amidst escalating tensions and trade restrictions in microchips.

He said that with stability, skilled labour force and economic and geopolitical nonalignment, Malaysia stands as a safe haven for investors.

"The proof is in the numbers. In 2023, the state of Penang — where I came from... Malaysia’s semiconductor hub — attracted US$13 billion in FDI (foreign direct investment), exceeding the total for the previous seven years combined.

"We are setting our sights on the future through an increasingly strategic focus on front-end activities, such as wafer fabrication, the design of integrated circuits and advanced packaging,” he told about 300-strong forum participants.

Anwar also paid tribute to Japan’s role and support in Malaysia’s economic progress.

"Truth be told, this could not have been achieved without Japan and our other partners in the region. Etched in our memory is the humble beginnings in Penang during the 1970s, when companies, such as Clarion and Hitachi, were part of the "Eight Samurai” — the first wave of electrical and electronics products (E&E) manufacturing investment into the country.

"Active Japanese FDI has been a crucial factor in the success of Malaysia’s semiconductor industry, and this is true even today, with recent large-scale investments coming in from Kaga Electronics and Ferrotec,” he said.

He added Japan and Malaysia shared a common vision for Asia’s future based on stability, connectivity and cooperation in support of a rules-based order, thus he is confident that both nations’ relations will only grow from strength to strength going forward.

"Prime Minister Kishida and I had two summit meetings in November and December, culminating in the upgrading of our bilateral relationship to a Comprehensive Strategic Partnership. We also expanded our cooperation into the realm of security, collaborating in the maritime security sphere,” he said.

Japan is Malaysia’s fourth-largest trading partner for nine consecutive years. In 2023, total trade between Malaysia and Japan was valued at RM156.64 billion (US$34.39 billion).

Meanwhile, Malaysia is continuing to build its capabilities in other sectors in line with our economic complexity trajectory into chemicals, aerospace, pharmaceuticals, medical devices, the digital economy, electric vehicles, advanced materials and agro-based industries.

Anwar also highlighted Malaysia’s openness to trade and investment in manufacturing, services and the primary sector alike, evident in its FDI performance in 2023, which saw a 15 per cent increase compared to 2022, with approved foreign investments reaching RM188 billion. — Bernama