Trade data reinforce Malaysia’s criticality to the global semiconductor market. Semiconductor products constitute 27% of its total exports in 2024, a trading intensity that is unmatched in all but four countries (Appendix B). With almost US$85 billion in exports of semiconductor products, Malaysia ranks as the world’s sixth largest semiconductor exporter, surpassing major economies like the European Union, Japan and the US in both absolute and relative trade flows.
Malaysia’s trading partners in semiconductor products are global, largely reflecting a combination of market size and proximity. Five key players – ASEAN, China, the US, the EU and Taiwan – account for about two-thirds of Malaysia’s semiconductor exports and 80% of imports. The other major East Asian economies – Hong Kong, Japan and South Korea – also feature in the top 10 across both exports and imports. This overall share has remained largely stable since the prepandemic period, though there have been shifts in individual economies’ relative contributions in line with broader macroeconomic ebbs and flows. It is important to note that neither of the two primary players in the chip war, namely China and the US, ranks as Malaysia’s largest semiconductor trading partner in exports or imports, underpinning its relative economic non-alignment in the major power rivalry. Instead, ASEAN is the largest destination for Malaysian semiconductor exports while Taiwan is the biggest source of imports, both of which have grown in importance since the pandemic. As it stands, Malaysia does not appear to be overdependent on any individual economy for semiconductor trade in the aggregate, which could provide a buffer in the event of an escalation in trade tensions.
Malaysia’s criticality to semiconductor supply chains is further reinforced by its centrality to both American and Chinese trade in the sector…
https://www.isis.org.my/2026/01/19/supply-chains-and-geopolitical-crisis/