Malaysia to continue wooing global EV brands — Tengku Zafrul
11 Jan 2024
Malaysia, which has attracted leading American multinational Tesla to set up its regional headquarters here last year, plans to woo more companies like the electric vehicle (EV) giant to set up assembly plants here.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the endgame is to have the likes of Tesla build their plants in the country.
Currently, many electric vehicle (EV) makers are procuring components from Malaysia “in the billions”, he said, adding that Malaysia is doubling down on the semiconductor industry to tap the growing EV market.
“They want to realign the supply chain to ensure that the security and resiliency of their supply chain, so they are coming closer to Malaysia, and we are inviting many EV makers,” he said during an exclusive interview with CNBC’s “Squawk Box Asia” aired today.
He told the business news channel that the goal is for EV makers to expand their presence in the country, pointing out that Tesla is already one of Malaysia’s major charging station providers, while some of the largest Malaysian companies are also Tesla’s suppliers.
Last month, Tengku Zafrul said Malaysia has seen exponential growth in EV sales yearly and the government is optimistic the positive momentum would continue strongly, with more than 100,000 registered electrified vehicles recorded.
The minister said he believes that EVs would be the catalyst for the growth of Malaysia’s manufacturing industry exports.
Elaborating further, he said electrical and electronics products (E&E) is a vital part in the EV supply chain.
“Hence, there is a lot of potential in the new generation vehicles wherein more components, for example, semiconductor composites, chip components in a typical car today or even a hybrid car, (are needed at) around 1,500 chips in one car,” he said.
The National Investment Council (MPN), at its meeting recently, decided to set up the National Semiconductor Strategic Task Force (NSSTF) to allow the country to move up the value chain in the chips industry.
In a statement, Tengku Zafrul said the decision was arrived at in light of the importance of the semiconductor industry, which contributed 45.4 per cent (or RM593.5 billion) to Malaysia’s manufacturing industry export revenue.
“It is a platform specifically to develop the semiconductor ecosystem to attract strategic investments in the sector,” he said.
NSSTF, to be chaired by Tengku Zafrul, is expected to further strengthen the sector which currently contributes 13 per cent to the assembly, testing and packaging activities of chips globally and 10 per cent to the global semiconductor market.
During the interview with CNBC, Tengku Zafrul also said that the taskforce highlights the importance of the country’s semiconductor sector — which accounts for seven per cent of the country’s gross domestic product and half of its exports.
He said that the team will not only be looking at growing the semiconductor industry in Malaysia but will also seek to ensure there’s a “talent supply chain” in the country.
“Malaysia needs 50,000 electrical and electronics engineers every year, of which we (have) a shortage,” he said.
However, Malaysia is still in a good position to achieve the goal of growing its semiconductor industry.
“The good thing about Malaysia is this industry started in early ‘70s. So, it’s been here 50 years. And the foundation is strong for us today to move up the value chain,” he added.