KUALA LUMPUR (July 13): In the first quarter of 2026, the Malaysian economy expanded by 5.4%, supported by broad-based growth across services and manufacturing, said Economy Minister Akmal Nasrullah Mohd Nasir.

Investment momentum also remains strong as Malaysia recorded RM92.8 billion in approved investments during the first quarter of this year, with more than 50,000 jobs expected to be created.

He added that during the first five months of 2026, electrical and engineering (E&E) exports expanded by 39.7% to RM382.9 billion, accounting for 48.2% of Malaysia’s total exports.

“These figures demonstrate resilience. But they also remind us of our responsibility. A sector that contributes almost half of national exports cannot remain merely a production platform. It must become an innovation platform that drives higher productivity, better wages, stronger local companies and deeper technological capability.”

“For the government, this is not simply an industrial ambition. It is an economic restructuring imperative,” said Akmal during the closing keynote speech at The Edge-HSBC E&E Symposium 2026, themed "The Value Chain Shift: Scaling Talent, Capital and Capability Up the Chip Ladder", at the KLGCC Convention Centre.

Recognising Malaysia’s half-century history of success in the semiconductor industry, Akmal said now the industry must serve as the launchpad for higher economic returns.

An example of this is the ongoing strategic collaboration between Malaysia and global semiconductor IP giant Arm, which focuses on granting local firms direct access to advanced intellectual property (IP) and compute platforms, significantly shortening commercial research and development timelines while reducing capital risk.

To date, six Arm technology access tokens have been successfully granted to four Malaysian companies, comprising three Arm Compute Subsystems accesses and three Arm Flexible Access licences.

The collaboration also aims to train 10,000 semiconductor professionals over four years. As of 3 July, 1,530 participants had undergone training under the initiative this year.

"The question is no longer whether Malaysia can participate in the semiconductor industry. The more important question is whether Malaysia can move higher, capture more value and ensure that a greater share of that value is retained within Malaysian companies, Malaysian capabilities and Malaysian talent."

This industrial transition comes at a critical juncture for the global economy, where overall growth is projected to moderate to 3% in 2026 amid geopolitical frictions, trade fragmentation, and policy uncertainties.

Malaysia is one of the world’s most trusted nodes in the global semiconductor supply chain and is now ranked as the world’s sixth-largest semiconductor exporter and contributes around 13% of global assembly, testing and packaging activities.

However, being reliable is no longer enough, Akmal said, and the next chapter of Malaysia’s semiconductor journey cannot be built on volume alone, but value as well.

“Global companies today are no longer assessing investment destinations only on the basis of cost and efficiency. They are also looking at energy security, water availability, logistics reliability, regulatory certainty, talent depth and the speed at which governments can solve problems,” he said.

“Malaysia must therefore compete not only as a manufacturing location, but as a technology and innovation partner, because technology leadership is no longer measured simply by how many factories a country host, but by how much knowledge it creates, how much innovation it commercialises and how much value remains within its economy.”