The trade war between China and the US is intensifying, and Malaysia's semiconductor left and right will be at the source

Starting in 2025, the tax on semiconductor exports from China to the US will double, that is, from 25% to 50%. Market participants believe that not only will it have little impact on local companies, but they are also expected to benefit from it, so they will continue to be optimistic about technology stocks.

Research analysts at Societe Generale Investment Bank pointed out that in fact, since the US imposed tariffs in 2019, the impact on Malaysian companies has not been significant, or even nothing. Plus, the total value of affected products is relatively small.

Analysts said that in fact, the trade war between China and the US is getting more intense, which is good news for the Malaysian semiconductor sector. This is because foreign capital continues to flow in, and supply chains are fragmented and relocated, and the spillover effects on local companies are obvious.

“The increase in tariffs is actually not surprising, because since the outbreak of the Sino-US trade war five years ago, there have been major shifts and differentiation in the supply chain, making the semiconductor supply chain more resilient in dealing with such types of adjustments.”

Malaysia's location is neutral

Analysts said that as the world finds alternative solutions to mitigate geopolitical risks, Malaysia can benefit from the “China +1” strategy, because with its strong ecosystem, basic measures, and Malaysian talent pool, it has attracted countries to set up factories.

In addition, Chinese suppliers serving large US multinational companies have also begun to cooperate with Malaysian companies to set up factories in Malaysia so that they can continue to supply American customers.

Furthermore, by shifting to neutral countries such as Malaysia, certain products or materials may also avoid being affected by the increase in US tariffs.

Furthermore, as US companies avoid Chinese suppliers, this has also opened doors for Malaysian companies, particularly in segments such as automated test equipment (ATE).