Malaysia is doubling down on the chip industry to capture growth in EVs

Tesla Inc. signage throughout a launch of firm’s Model Y electrical automobile in Kuala Lumpur, Malaysia, on Thursday, July 20, 2023.

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Malaysia is doubling down on the semiconductor industry to capture growth in the rising electrical automobile market.

In an unique interview with CNBC’s “Squawk Box Asia” on Thursday, Trade and Industry Minister Zafrul Aziz identified that EV makers procure parts from Malaysia “in the billions.

As such, “they need to realign the provide chain to make sure that safety of [their] provide chain, resiliency of the provide chain is there, so they’re coming nearer to Malaysia and we’re inviting many EV makers to come,” he stated.

The objective was for EV makers to develop their presence in the nation, he stated stating that Tesla is already certainly one of Malaysia’s main charging station suppliers. Some of the largest Malaysian corporations are additionally Tesla’s suppliers.

The “finish recreation” is for “the likes of Tesla, the remainder of them [to come] and construct their giga manufacturing unit meeting in the nation,” Zafrul stated.

In August, Tesla arrange a regional headquarters in Malaysia, and Prime Minister Anwar Ibrahim informed CNBC’s Martin Soong at the time that “EV occurs to be our priority.”

Zafrul told Malaysian media in December that he believed EVs would catalyze the growth of Malaysia’s manufacturing industry exports, and that Malaysia remained a beautiful vacation spot for electrical automotive traders.

He identified stated that semiconductors are integral to the manufacturing of automobiles, however much more so in EVs. A traditional automotive comprises about 5,000 chips, however an EV can require up to 15,000 chips, he stated.

“So, Malaysia is there in that provide chain and we would like to reap the benefits of that,” he added.

Moving up the worth chain

In his assertion, Zafrul reportedly stated the industry was very important for the nation’s electrical and electronics (E&E) sector and different technology-based industries resembling EVs.

Zafrul informed CNBC that the taskforce highlights the significance of the nation’s semiconductor sector — which accounts for 7% of the nation’s gross home product and half of its exports.

The staff won’t solely be rising the semiconductor industry in Malaysia, however can even search to guarantee there is a “expertise provide chain” in the nation.

Malaysia wants 50,000 electrical and electronics engineers yearly, “of which we [have] a scarcity,” he informed CNBC.

However, Malaysia is nonetheless in a superb place to obtain the objective of rising its semiconductor industry., he stated.

“The benefit of Malaysia is this industry began in early 70s. So it has been right here 50 years. And the basis is sturdy for us right now to transfer up the worth chain.”

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