This article first appeared in The Edge Malaysia Weekly on May 13, 2024 - May 19, 2024

On March 11, the Financial Times (FT) published an article titled “Malaysia: the surprise winner from US-China chip wars”. Two days later, The New York Times (NYT) chimed in with a piece titled “Malaysia rises as crucial link in chip supply chain”.

In a nutshell, both FT and NYT pointed out that the escalating trade tensions between the US and China have put multinational chipmakers in a tight spot, pushing them to diversify their supply chains.

With its five-decade history in the back-end of semiconductor manufacturing — packaging, assembling, and testing chips — Malaysia is well prepared to meet this demand.

For those familiar with Malaysia’s electrical and electronics (E&E) industry, this isn’t breaking news. The notion of Malaysia’s tech sector benefiting from the trade diversion isn’t new.

It all started back in 2018, when the US and China began slapping tariffs on each other’s goods. The tech cold war heated up two years later as both countries started building their own semiconductor supply chains, while the world was grappling with a global chip shortage during the Covid-19 pandemic.

Over the past few years, Malaysia’s E&E sector has consistently attracted foreign direct investments (FDI) from multinational corporations (MNCs). Whether in greenfield or brownfield investments, the headline figures show that Malaysia has indeed been on the radar of MNCs.

So, why the sudden interest in the same week in March by both FT and NYT? Well, if Malaysia were a girl, and FT and NYT were boys, we’d probably be saying, “Took you long enough to find me”.

Was it just a strange coincidence? Or could it be that our unity 

government — the Ministry of Investment, Trade and Industry (Miti) and Malaysian Investment Development Authority (Mida) in particular — is doing better than expected in promoting Malaysia on the global stage?

In the high-stakes drama of the US-China chip war, I can’t help but imagine that Malaysia has found itself playing a role similar to the Continental Hotel in the John Wick movies.

It’s like Malaysia said, “Move over, New York City! There’s a new Continental in town, and it’s not a sanctuary for assassins; it’s for semiconductor firms!”

Just as the Continental Hotel provides a safe haven for hitmen and high-end criminals, Malaysia has become the go-to destination for chip production in the current US-China tech stand-off.

We are somewhat neutral territory where even John Wick and his enemies can take a timeout from their cat-and-mouse games.

But here’s the twist: while Malaysia is playing the charming host, we have got our own set of challenges to deal with.

It’s like trying to keep the peace in the Continental Hotel while John Wick is on the loose — only our version involves a weak ringgit that is as vulnerable as a henchman 

facing off against John Wick, and a talent shortage that has led to scarcer expertise than an honest politician’s promise.

But fear not, fellow Malaysians, because just like in the movies, our leaders are handling the chaos 

with style and grace. They’re like Winston Scott, the owner and manager of the New York Continental Hotel, keeping calm and carrying on while the world around us goes berserk.

And just like the Gold Coins that are used mostly in the Continental Hotel chains for various underworld services, Malaysia might need to come up with its own version (since our ringgit remains so weak even if more MNCs seem interested to invest in the country).

Picture this: instead of Gold Coins, we could have “chip coins” — the currency of choice for tech moguls and chip manufacturers.

Now, just like the Continental Hotel has its own set of rules, Malaysia’s chip industry should have its own dos and don’ts for its guests. All eyes are on Miti’s comprehensive strategic semiconductor plan, which is anticipated to come out by the end of the month.

While it might seem like we have stumbled upon a Hollywood blockbuster, Malaysia’s role in the US-China chip war is no joke. We might have our fair share of challenges, but hey, who would have thought that Malaysia would be the Continental Hotel of the tech world?

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