Malaysia sees growing semiconductor demand as EV industry expands amid West Asia conflict, with focus on higher-value chips and sensors
KUALA LUMPUR: Demand for semiconductors is expected to continue rising in tandem with the expansion of the electric vehicle (EV) industry, which is also gaining momentum following the conflict in West Asia, said Investment, Trade and Industry Deputy Minister, Sim Tze Tzin.
He noted that the industry is now moving towards higher-value chips that require more advanced sensors.
“For example, the use of sensors such as Light Detection and Ranging (LiDAR) is becoming increasingly important in EV development, which in turn requires more sophisticated and higher-value chips,” he told reporters after delivering a speech at the SME-MNC Connect Day 2026.
The event was organised by the Malaysia Semiconductor Industry Association (MSIA) here today.
Sim added that several companies are keen to collaborate with a Penang-based integrated circuit (IC) design firm to develop next-generation chips for EVs.
He highlighted that Malaysia plays a key role in supplying electrical and electronic (E&E) products and a wide range of chips globally, serving industries such as automotive, semiconductors and artificial intelligence.
MSIA president Datuk Seri Wong Siew Hai noted that the country currently has six major companies producing automotive chips.
Commenting on the ongoing conflict in West Asia, Sim said that Malaysia has seen very limited disruptions to its supply chain so far, and that exports have continued to grow despite global headwinds.
“Malaysia and Southeast Asia as a whole have actually become key destinations, as they are seen as stable, peaceful and neutral,” he said.
Malaysia External Trade Development Corporation (MATRADE) senior director of Strategic Planning Division, Raja Badrulnizam Raja Kamalzaman said Malaysia’s E&E exports grew by 26% year-on-year to RM203 billion from January to March this year.
This shows that the global headwinds had a limited impact as Malaysia’s export markets are well diversified, he said.
Meanwhile, Wong said the SME-MNC Connect Day 2026 is held to bridge the perspective gap between small and medium enterprises (SMEs) and multinational corporations (MNCs) so that both sides can better understand how to work together effectively within a highly complex semiconductor ecosystem.
“The event also aims to demystify the evolving requirements of the industry, particularly in areas such as advanced packaging, procurement standards, and supply chain expectations.
“At the same time, it provides a practical platform for direct engagement where SMEs can hear directly from MNCs on the opportunities, the requirements, onboarding processes, and what it truly takes to become a trusted partner,” he added.
