Is Malaysia's semiconductor sector trapped in a low-value cycle?
Malaysia has successfully attracted significant foreign investment to build its semiconductor industry. However, the nation now faces a critical challenge: its local firms are struggling to move up the value chain, leaving the industry in a precarious position with limited paths forward.
Malaysia followed the development models of its Asian neighbors to establish itself as a hub for semiconductor manufacturing. By leveraging foreign direct investment, the country carved out a specific niche within the global supply chain.
Despite this growth, the local semiconductor cluster remains stuck in a tenuous position. The industry currently lacks the capital to invest in future technologies, keeping local firms trapped at the lower end of the value chain with few clear prospects for advancement.
