Introduction Malaysia’s electrical and electronics (E&E) sector took off in the 1970s and has seen an impressive compounded annual growth of 16% in exports over the past 50 years.1 The E&E sector remains a major driver of the economy, contributing an estimated 5.5% to the country’s GDP2 and 37% of exports in 2021.3 Today, Malaysia is the sixth largest semiconductor exporter globally4 and commands. [...] The tech rivalry has resulted in the bifurcation of the semiconductor industry with examples of policies and efforts listed in Appendix 1. [...] In January 2023 the US, Netherlands and Japan restricted exports of advanced chip-making machinery to China.13 In response, in July 2023, China retaliated with export controls of gallium and germanium where it is a dominant exporter to Japan and Germany, the Netherlands and the US. [...] The overall impact of this tech rivalry has resulted in an increase of rare earth prices, disruptions in supply of chemicals and a potential reduction of 2% in global growth.14 1.3 Rising demand due to increasing digitalisation The pandemic and emergence of new technologies increased the demand for semiconductors. [...] In line with this is the establishment of a special committee on semiconductors.42 The National Semiconductor Strategic Task Force (NSSTF) with MITI as chair and the Collaborative Research in Engineering, Science and Technology (CREST), as secretariat is expected to discuss review and reforms of the incentive policy.43 2.2 Challenges with talent According to the 2022 Malaysia Semiconductor Industr.
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