Malaysia Projects EV Sales to Boom After Setting Up New Semiconductor Task Force

In an exclusive interview with CNBC's "Squawk Box Asia," Trade and Industry Minister Zafrul Aziz unveiled Malaysia's strategic push into the semiconductor industry to capitalize on the burgeoning electric vehicle (EV) market.

Malaysia is headed toward the EV industry following opening the first Tesla Supercharging station in Johor in October 2023.

This will position Malaysia as a critical player in the EV supply chain. This is the go-signal if it wants to attract more EV manufacturers in the country.

Malaysia's Attraction for EV Manufacturers

Highlighting the significance of EV manufacturers sourcing components worth billions from Malaysia, Aziz emphasized the desire to realign and improve the supply chain's security and resilience.

The invitation extends to numerous EV makers, with the ultimate goal of enticing industry giants like Tesla to establish gigafactories in the country. As said earlier, Elon Musk's EV firm has already set up a regional headquarters in Malaysia, which opens a leeway for investors willing to invest in Southeast Asian nations.

Semiconductor Industry as the Catalyst

Recognizing the integral role of semiconductors in EV manufacturing, Aziz pointed out that while a conventional car comprises around 5,000 chips, an EV's complex structure demands up to 15,000 chips, per Malaysia Mail.

To leverage Malaysia's position in this crucial supply chain, the country has launched a national semiconductor task force, signaling its intent to ascend the value chain in the semiconductor industry.

Focus on the 'Front End' of Chip Manufacturing

The task force's primary focus is on the "front end" of the chip manufacturing process, involving wafer fabrication and circuit engraving.

Malaysia aims to enhance its semiconductor capabilities and attract strategic investments by concentrating efforts on this critical phase.

National Semiconductor Taskforce

Establishing a national semiconductor strategic task force marks a significant step toward growing Malaysia's semiconductor ecosystem.

Minister Aziz stressed the industry's vitality, contributing 7% to the country's GDP and half of its exports. The task force's mandate goes beyond industry growth; it extends to nurturing a robust "talent supply chain."

Malaysia acknowledges the need for 50,000 electrical and electronics engineers annually and is committed to addressing this shortage, Free Malaysia Today reports.

For the years to come, Malaysia is expected to focus more on its chip business as it aims to boost the EV industry. All it wants is to be an established hub for EV manufacturing. The following ventures will happen as planned.

Meanwhile, India hopes to strengthen its connection as Vietnam-based EV maker VinFast aims to set up its first production unit in Tamil Nadu.

Outside India, VinFast is also reportedly expanding its service in the US. Stepping up onto American soil could further boost its brand amid the heavy competition against non-Asian EV firms.