Malaysia–Taiwan Trade Overview: A Record Year, and a Deficit

Trade between the two economies reached RM233.02 billion in 2025, growing 32.3% and accounting for 7.6% of Malaysia's total trade. Exports to Taiwan also hit a record, rising 31.2% to RM87.95 billion on strong shipments of electrical and electronic products, optical and scientific equipment, and machinery. However, imports grew even faster, so Malaysia ran a bilateral deficit of roughly RM57 billion with Taiwan.

This is the opposite of Malaysia's position with the United States, where it runs a large surplus, as covered in our Malaysia–US imports guide. The reason is structural. Taiwan supplies the upstream, high-value inputs — wafers, chips, and server hardware — while Malaysia handles much of the assembly, packaging, and testing further down the chain.

What Malaysia Imports from Taiwan: Three Codes Dominate

Product concentration is extreme. Integrated circuits under HS 8542 account for about 56.5% of Malaysia's imports from Taiwan, computers and servers under HS 8471 add roughly 15.2%, and computer parts under HS 8473 contribute about 10.2%. Together, these three codes make up around 81.9% of the total. Everything else, from machinery to chemicals, shares the remaining 18.1%.

Why Chips Flow Both Ways

It may look odd that Malaysia both imports and exports large volumes of chips. In practice, the two flows are different stages of the same supply chain. Wafers and advanced chips arrive from Taiwan, Malaysian facilities in Penang, Selangor, and Johor then package and test them, and finished or semi-finished products flow back out. That is why Malaysia's exports to Taiwan also set a record in 2025. For the equipment side of this process, see our semiconductor equipment import guide.

Taiwan in Malaysia's Electronics Imports: The Fastest-Growing Source

Electrical and electronic goods are Malaysia's single largest import category, at MYR 469 billion in 2025. Within that, Taiwan supplied about MYR 92.6 billion — close to one-fifth — making it Malaysia's second-largest source after China. More importantly, Taiwan was the fastest-growing origin, adding roughly MYR 25 billion compared with 2024, ahead of China (+MYR 18.5 billion) and South Korea (+MYR 14.7 billion).

For the China side of this picture, see our Malaysia–China imports guide.

The AI Hardware Connection

A growing share of the Taiwan flow is tied to artificial intelligence. Taiwan's computing-system exports to Malaysia jumped 366% year-on-year in March 2025, and Malaysia's GPU imports reached $6.45 billion in the first four months of that year, as we detailed in our AI server and GPU import analysis. Taiwanese server makers are also directly involved in Malaysian projects — Wiwynn is a partner in a large AI data center complex in Johor. As a result, HS 8471 and 8473 now carry far more weight in this relationship than they did a few years ago.

Momentum Check: 2025 Surge vs Early 2026

The growth rate has not been steady. Imports from Taiwan were up 40.3% in the first five months of 2025, finished the full year up 32.9%, and then fell 13.6% in January 2026, even as exports to Taiwan hit another record.

One month is a noisy signal, especially because AI hardware shipments tend to arrive in large lumps rather than steadily. Even so, one H1 2026 analysis reports that Malaysia's imports of memory and logic chips (HS 854232) reached $19.49 billion, up 240% year-on-year, with Taiwan among the fastest-growing sources — a reminder that the longer-term direction remains upward.

A Note on Data Sources

Figures for Malaysia's imports from Taiwan differ between sources. Malaysia's trade ministry reports RM145.07 billion for 2025 (about US$34 billion), while commercial databases show US$31.0 billion to US$33.9 billion, depending on valuation method and classification. We use the official ringgit figure as the anchor, and treat HS-level shares as approximate.

Risks and What to Watch

Concentration is the main risk. With integrated circuits alone near 56% of imports from Taiwan, any disruption to Taiwanese chip supply would be felt quickly in Malaysian assembly lines. In addition, advanced-chip flows are subject to export-control scrutiny, which we cover in our AI server guide. Finally, because AI-related shipments are lumpy, monthly figures can swing sharply. Nonetheless, the direction of travel is clear: as long as global demand for chips and servers stays strong, Taiwan is likely to remain one of Malaysia's most important suppliers.

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