• Malaysia is aiming to achieve high income nation status, as highlighted in the 12th Malaysia Plan
• E&E is a key economic driver, and one of the identified strategic and high impact industries
• Malaysia is already established in backend semiconductors, and aspires to move up the value chain
• It however has much room to catch up in high skilled talent, R&D, and front-end ecosystem

Malaysia’s electrical and electronics (E&E) sector already plays an important role in the economy. We believe that E&E will remain a key driver of industrial development and its eminent position will be emphasised over the coming years, with Malaysia aiming to achieve high income nation status.

As highlighted in the 12th Malaysia Plan (12MP) – released in late-September, the country is
striving to grow into a ‘prosperous, high income, inclusive, low carbon, high-tech and sustainable nation’ by 2025. The plan identifies E&E as one of the strategic and high impact industries that would hopefully help to propel economic growth to a target of 4.5% – 5.5% per annum over 2021 to 2025 (similar to the prepandemic growth path).

Malaysia’s key focus will be moving E&E up the value chain, but in our view, this will be an uphill
task. It has much room to catch up to other more advanced Asian peers in areas such as high skilled talent, research and development (R&D), and a more comprehensive ecosystem involving the front end.