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MALAYSIA must urgently diversify its export markets following the US’ plan to impose a 100% tariff on imported semiconductors, a move expected to heavily impact the local industry’s reliance on the US as its main destination.
Universiti Sains Islam Malaysia (USIM) Faculty of Economics and Muamalat’s Prof Datuk Dr Mustafa Mohd Hanefah, said the tariff shock, combined with low global crude oil prices, should be addressed in the 13th Malaysia Plan (MP13).
“This is not the time to depend entirely on the US. We must quickly intensify trade negotiations with countries such as China, Korea, Japan and Gulf Cooperation Council (GCC) to diversify markets and reduce dependency risks,” he told Utusan Malaysia.
He added that Malaysia is facing “two simultaneous pressures — a slowdown in petroleum revenue and disruptions to chip exports”, which calls for a new national strategy centred on technology investment and market diversification.
Mustafa also said Malaysia must lessen its dependence on multinational giants like Intel Corp by building local capabilities.
“Instead, the country must invest seriously in research and development (R&D) to produce local chips and its own intellectual property,” he said.
Meanwhile, Universiti Kebangsaan Malaysia (UKM) Faculty of Economics and Management’s Prof Dr Mohd Rizal Palil said companies are unlikely to avoid the US tariffs in the short term.
“Production cannot be shifted overnight. Whether they like it or not, companies will have to absorb the additional costs while seeking long-term solutions,” he said.
He said the long-term focus should be on reviving Penang and Cyberjaya as regional semiconductor hubs, supported by investment incentives, infrastructure upgrades and skilled workforce development.
“Malaysia must emerge as an alternative in the global supply chain — not merely as an exporter of raw materials, but as a centre for high-value chip development and manufacturing,” he said.
Mohd Rizal also noted that moving production to the US to bypass tariffs is “highly unlikely” due to high costs and complex regulations, and urged Malaysia to strengthen ties with chipmakers in Taiwan, South Korea and Japan to avoid a wider tariff spillover.
He warned that political changes in the US could directly affect Malaysia’s semiconductor ecosystem, citing reports of US President Donald Trump’s plan to remove Intel’s CEO.
“If Intel’s focus returns entirely to the US, Malaysia will lose one of its key industry players. This will affect jobs and the local technology ecosystem,” he said. — TMR
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