PENANG – Construction cranes still surround the brand new plant in the Kulim industrial park in Malaysia.
As the rivalry between the United States and China over cutting-edge technology simmers and trade restrictions pile up, companies – particularly those in crucial sectors like semiconductors and electric vehicles – are looking to strengthen their supply chains and production capabilities. South-east Asia’s strategic position in the South China Sea and longstanding economic ties to China and the US make the region an attractive place to set up shop.
Malaysia’s history in the back end of making semiconductors was one of the primary draws, Mr Gerstenmayer said. “US and European companies and even Chinese companies wanted to diversify out of China,” Datuk Seri Zafrul said. China, too, is locating production facilities outside the mainland, in part, some say, to sidestep US sanctions. It’s a “China plus one” strategy.
Malaysia is already the world’s sixth-largest exporter of semiconductors, and packages 23 per cent of all American chips. “Everything is here,” said Mr Eric Chan, a vice-president and general manager at Intel in Malaysia. After half a century, the network and infrastructure are not easily duplicated. He also mentioned the government’s crucial cooperation during the pandemic in keeping factories open.
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