Semiconductor Exports from Malaysia: Market Overview

Semiconductor exports from Malaysia rest on a production track record that stretches back about fifty years. According to research from the ISEAS – Yusof Ishak Institute, the sector employs around 260,000 workers and generates some US$95.6 billion in exports per year. Measured by HS code instead, integrated circuits (HS 8542) alone were worth US$91.27 billion in 2025, or 26.97% of Malaysia's total goods exports, according to TradeInt.

Momentum has carried into 2026. OEC data indicates that Malaysia's exports rose 19.6% to MYR147 billion between January 2025 and January 2026, with integrated circuits making up 32% of that total (MYR48.4 billion). As a result, chips remain by far the most important line in Malaysia's export basket.

Key Trends Shaping Semiconductor Exports from Malaysia

Several forces are pushing semiconductor exports from Malaysia higher, and most of them point in the same direction. Together they explain why global chipmakers keep choosing Malaysia for new capacity.

1. A Wave of New Investment

Malaysia's National Semiconductor Strategy is backed by RM25 billion in government funding, and it has already helped secure more than RM63 billion in semiconductor investments as of March 2025. Industry analysts put total announced capital commitments above US$100 billion. Consequently, large projects are now spread across assembly, testing, wafer fabrication equipment and memory.

Figures differ because the announcements span different years and scopes. Texas Instruments leads with RM14.6 billion for advanced testing and assembly, followed by Intel at RM12 billion for advanced packaging, Micron at RM4.4 billion for solid state drives, and Lam Research at RM1 billion for wafer fabrication equipment.

2. Supply-Chain Diversification

Geopolitical rebalancing is steering high-value assembly and advanced packaging toward Malaysian sites. ISEAS notes that several multinationals with facilities in China are looking to diversify, and Malaysia has become a natural second base. This dynamic also shapes the trade relationship with Washington, which we cover in our Malaysia US trade data analysis.

3. Moving Beyond Assembly, Test and Packaging

Malaysia's semiconductor sector is still concentrated in assembly, test and packaging (ATP), a segment that offers lower value-added than chip design or fabrication. Nevertheless, ISEAS points to emerging capabilities in integrated circuit design and in higher value-added activities such as advanced packaging. Moving up this ladder is the central goal of the national strategy.

4. Strong Global Demand

Finally, demand for chips tied to AI hardware keeps rising. On the import side, Malaysia's GPU purchases reached $6.45 billion in just four months of 2025, as we detail in our Malaysia AI server and GPU import data report. Tendata likewise attributes Malaysia's resilient 2025 exports to strong global demand for semiconductors and electrical products.

Where Semiconductor Exports from Malaysia Go

Chips are not reported separately by destination in most public datasets, so the closest verified proxy is Malaysia's electrical and electronics exports, a category in which semiconductors are the largest component. In 2025, the United States was the top destination at MYR124 billion, narrowly ahead of Singapore at MYR122 billion.

Singapore (up MYR20.2 billion), the United States (up MYR15.4 billion) and Chinese Taipei (up MYR14.7 billion) were the fastest-growing markets between 2024 and 2025. Note that OEC's chapter-level total (MYR647 billion) is narrower than the RM712 billion electrical and electronics figure used earlier. For the China side of the story, see our guide to Malaysia–China trade.

Top Companies Behind Semiconductor Exports from Malaysia

A small group of multinationals dominates semiconductor exports from Malaysia. Intel and Infineon together hold roughly 74% of the market by tracked project spend, according to Industrial Info, while a wider ring of memory, packaging and equipment firms adds depth.

Intel's position stands out. Beyond being the largest single exporter, it has also been the largest importer, buying roughly US$7.89 billion of wafers and chips in 2025 as feedstock for its Penang operations. That pattern, where imports of components feed exports of finished devices, is typical of Malaysia's semiconductor model and appears again in our Malaysia importer list.

Challenges for Semiconductor Exports from Malaysia

The headline numbers are impressive, yet the structure carries real limits. Because most activity sits in assembly, test and packaging, each exported chip captures less value than it would from design or wafer fabrication. In addition, the sector depends heavily on foreign multinationals, so domestic ownership of the highest-margin activities remains thin.

Regulatory scrutiny is a second pressure point. Rapid growth in advanced-chip flows has drawn attention from analysts and officials, as discussed in our GPU import analysis. Even so, Malaysia's established testing and packaging base, combined with RM63 billion in secured investment, gives the sector a strong platform for climbing the value chain.

Frequently Asked Questions About Semiconductor Exports from Malaysia

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