KUALA LUMPUR, April 22 – As trade tensions continue to simmer between Beijing and Washington, foreign companies are moving their manufacturing facilities out of China in a bid to establish production hubs in other nations, ChannelNewsAsia (CNA) reported.
This strategy – known as China Plus One, where companies diversify their business outside of China – has greatly benefited Malaysia, which has grown to become the sixth-largest exporter of semiconductors in the world.
It has had a 50-year head start in the sector since Intel set up its first international manufacturing plant in the northern state of Penang.
According to CNA, the United States chip giant is also building another factory in Penang, which will become the company’s first overseas facility for advanced 3D chip packaging.
With many semiconductor and electric vehicle companies relocating to Southeast Asia to bypass trade restrictions and strengthen their supply chains, Malaysia is in a particularly sweet spot.
Its existing ecosystem – particularly in Penang and adjacent Kulim in the state of Kedah – is a magnet for technology companies seeking to de-risk amid intense rivalries between the US and China over cutting-edge technologies.
Property consultant Samuel Tan, executive director of KGV International Property Consultants, told CNA: “We are friendly to both China and the US.
“Because of the trade war between them, we become a suitable conduit to balance trade war between these two countries … European countries (are also) relocating to Malaysia because they want to export their products to China.”
