06/02/2026

BIZ & FINANCE FRIDAY | FEB 6, 2026

14

Ű BY JOHN GILBERT sunbiz@thesundaily.com

Malaysia’s semiconductor edge strong but gap persists

KUALA LUMPUR: Malaysia’s clear competitive advantage lies in the semiconductor industry, built on a strong foundation of education, infrastructure, labour capacity and long-term planning. While Malaysia accounts for less than 1% of the global economy, it represents roughly 14% of global semiconductor participation and nearly 20% in assembly, testing and packaging (ATP). This is now a major national strength – with much of the foundation laid by the late Tun Dr Lim Chong Eu, who was Penang chief minister from 1969 to 2020 – contributing around 40% of export revenue, with exports exceeding Malaysia’s gross domestic product in scale and making the industry both strategically and economically sig nificant. KSI International Advisory Board chairman Tan Sri Dr Munir Majid said, however, Malaysia’s biggest challenge is that it remains stuck in mid-level activity, particularly ATP, without moving up the value chain. He said the root issue is not technical capability alone, but a political-economic structure that discourages optimisation, openness and innovation, contributing to talent migration and underutilised potential. “If Malaysia wants to sustain its advantage, it must shift towards higher-value semiconductor seg ments and make strategic decisions on what types of chips to develop and which markets to serve – whether AI driven Western demand or China’s industrial ecosystem – while also building stronger regional capabilities within Asean. “Ultimately, progress depends on innovation, competitiveness and a more open, merit-driven education and economic environment,” Munir, who is also the Asean Business Club KUALA LUMPUR: is targeting total sales of RM270 billion of property this year, up from RM250 billion in 2025 on the back of market recovery and policy measures, said Housing and Local Government Minister Nga Kor Ming ( pic ). He attributed to the market having fully recovered from Covid-19 and seeing steady growth year by year. “In 2023, total sales were under RM80 billion, 2024 about RM232 billion, 2025, total sales were about RM250 billion,” he said at the Malaysia Economic Forum (FEM) 2026 yesterday. He stressed that Malaysia’s property market is not experiencing a bubble and this remains a key priority in his role as a regulator. “Under my watch, Malaysia’s property sector does not have a bubble. That is why I can sleep well every night,” he said. On financing, Nga said the government has effectively reduced lending risk for banks and has gone further to support affordability. “If MBSB refuses to lend, then go to Maybank. You have to make financing easy, longer, cheaper,” he added. This year, the Madani government has enhanced the Jaminan Kredit Perumahan (SJKP) scheme. “We now have up to RM40 billion in government guarantees. As of this Malaysia Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

strong footing, with growth last year estimated at 4.9% based on third- and fourth-quarter figures. “This is on the upper hand of our initial forecast. In fact, it is even when we are above our forecast range at 4.9%. So all the engines of the economy are firing.” Consumption continues to be supported by high labour force participation, strong wage growth and government policy measures. “And we see unemployment is at the lowest right now, it’s about 3%. So this means consumption will be continuing to be supported even as we enter into 2026.” Abdul Rasheed said Malaysia has been in an investment upcycle since 2023. “And the kind of investment that we’re getting right now are the high quality investments, which creates high value added activity, which creates high income jobs.” The external sector has remained resilient despite tariffs and trade disruptions, Abdul Rasheed said. In addition, he said, tourism has emerged as a key growth driver, with tourist arrivals from January to October last year surpassing both 2023 levels and pre-pandemic figures. “One important point here is that even the per capita spending by the tourists has also been higher than what we saw during the pandemic.” - by HAYATUN RAZAK Trans-Pacific Partnership (CPTPP) – is designed to strengthen market access and expand trade opportunities. “While the direct utilisation of these agreements by companies remains relatively low, it is improving, and the broader impact is evident: close to 70% of Malaysia’s trade already occurs with countries where FTAs are in place. “However, market access is increasingly shaped by non-tariff barriers, including technical stan dards, certifications, and regulatory requirements. This is where mutual recognition agreements become critical, as they reduce duplication and speed up entry into foreign markets. “Negotiating these agreements is complex and highly strategic, but the government’s role remains clear – to protect national interests while building stronger international colla boration, including new initiatives under CPTPP to deepen cooperation among global trade and promotion agencies,” he said. MBCSC 2026 brought together about 150 delegates comprising policymakers, business leaders, economists, industry practitioners and sustainability advocates. The conference served as a high-level platform to examine Malaysia’s economic positioning amid global uncertainties, industrial transform ation, and the national sus-tainability agenda.

KUALA LUMPUR: Bank Negara Malaysia (BNM) is cautiously optimistic on Malaysia’s 2026 growth outlook, citing supportive economic tailwinds while noting that global uncertainties remain elevated, said governor Datuk Seri Abdul Rasheed Ghaffour. He said the combination of domestic demand, investment, exports especially E&E driven by AI, tourism, and strong economic fundamentals are expected to drive Malaysia’s economic growth this year. “We have strong fundamentals. It has been mentioned that we have a diversified economy and diversified export markets. We have a strong banking sector to support inter mediation, and we have a strong external sector as well. The AI boom will definitely continue to provide demand for our E&E sector,” he said at the Malaysia Economic Forum 2026 yesterday. Abdul Rasheed said it is important for the central bank to ensure it provides a conducive environment through monetary and financial stability to achieve sustainable growth. “I would say that we are cautiously optimistic of 2026 while we do see the tailwinds coming in, but of course there’s still a lot of uncertainty there. In terms of risk, we know there is a lot of uncertainty,” he added. He said Malaysia entered 2026 on a science parks and technology incubators. Without that depth, Malaysia risks remaining competitive on paper but falling short in real economic transformation,” he said. Malaysia External Trade Develop ment Corporation strategic com munications and head of trade publication deputy director Edison Choong Wan Sern highlighted Malaysia’s strong performance in overall trade last year, which reached RM3 trillion, an increase of 6%. He noted that Malaysia’s exports grew by 6.5% and imports by 6.2%, with trade growth currently tracking close to 9.5%. Beyond the headline numbers, this growth reflects real economic activity, including job creation, particularly in manufacturing, he said. “The discussion around Malaysia as a “semiconductor hub” is also timely, but a hub only holds credibility if it includes the full ecosystem, including higher-value capabilities at the top of the value chain. “Malaysia has clearly built that position in the electrical and electronics (E&E) sector, but outside of E&E, it remains unclear which other industries have reached true hub status.” Choong pointed out that Malaysia’s extensive network of free trade agreements (FTA) – including the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for the

o To sustain advantage, country must shift towards higher-value segments and this requires more than policy statements: Experts

effective labour market structure supported by constructive union employer collaboration,” he said at the session. Rajan said the domestic semi conductor sector is central to this strategy, and Malaysia’s policy focus is aligned with global trends. “Taiwan’s success, for example, was not driven by exports alone, but by strong technical institutions, long term industrial coordination, and visionary leadership – culminating in the rise of TSMC as a global leader in advanced logic manufacturing. “Under NIMP 2030, Malaysia has identified two priorities: streng thening chip design capabilities and positioning itself as a global hub for advanced manufacturing and ad vanced packaging. “However, value-added growth is what ultimately drives GDP, and moving up the semiconductor value chain will require more than policy statements. “It will require clear execution frameworks, credible talent pipelines, stronger innovation ecosystems, and industrial infrastructure comparable to what Taiwan built through its to 120% coverage for first-time home buyers, including additional amounts for renovation and furniture, under its guarantee scheme. “There is RM18 billion still available. I have a KPI to achieve, 100,000 home buyers. So far, I have achieved 97.8%.” He said only another two to three percentage points are needed to reach the target and urged support to promote the scheme through KPKT and ensure buyers make use of the SJKP programme. “Please seize the opportunity. First time homebuyers purchasing homes priced below RM500,000 enjoy stamp duty exemptions. In addition, there are interest rebates of up to RM7,000 until 2027.” Nga also said the Rent Tenancy Act (RTA), aimed at regulating Malaysia’s residential rental market, is now in its final review stage and the Bill is targeted to be tabled in the Dewan Rakyat this year. The Act, he added, is to protect the rights of both tenants and property owners. “The RTA is in its final review stage. I will go through each phase before submitting it to the Cabinet for approval, and once the Cabinet reaches consensus, we hope the Act can be approved by the Dewan Rakyat this year. That is the art of balancing that we are moving forward,” said Nga. Malaysia currently does not have a dedicated RTA.

president, said during a panel discussion at the Malaysia Business Competitiveness & Sustainability Conference 2026 (MBCSC 2026) yesterday. Executive director of the Asia Europe Institute at the University of Malaya Prof Datuk Rajan Rasia focused on the policy direction shaping Malaysia’s progress, saying that a useful reference point is the New Industrial Master Plan 2030 (NIMP 2030), launched in September 2023, which should be assessed proactively to ensure Malaysia moves in the right direction. He said one of its key objectives is to position Malaysia as a high-income country, and recent World Bank estimates suggest Malaysia has already crossed that threshold. “While these classifications can shift with exchange rates and global benchmarks, the bigger concern is whether income growth is sustainable and broadly shared. “The plan targets a meaningful rise in median household income by 2030, but achieving this will require stronger workforce development, better tech nical training systems, and a more

RM270b property sales target this year

BNM cautiously optimistic on 2026 economic growth outlook

morning, we have assisted 97,850 homebuyers in purchasing their first homes, with loans provided, all guaranteed by the government.” Nga added that RM18 billion in funds remain available, and urged eligible buyers seeking homes priced below RM500,000 to approach panel banks if they face difficulties securing loans. He also called on more banks to participate in the scheme. “Maybank and RHB are already on board. I do not know why Public Bank and CIMB Bank are so slow. You should tap into the RM18 billion fund guaranteed by the government. We have taken away the risk,” he said. Nga said the government goes beyond full guarantees by offering up