Middle East Conflict Disrupts Exports, Taiwan-Malaysia Trade Stable with Semiconductors as Key
While the Middle East conflict affected Malaysia's overall exports in March, trade with Taiwan remained stable, driven by semiconductors and IC products. Malaysian industry experts and scholars highlight the deepening economic ties due to the semiconductor supply chain, with Taiwanese companies investing heavily in Malaysia's packaging and testing sector.
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- 📰 Published: April 30, 2026 at 14:22
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Central News Agency
(Central News Agency reporter Huang Tzu-chiang, Kuala Lumpur, 30th) The Middle East conflict has disrupted global logistics, affecting Malaysia's overall export performance in March, but trade with Taiwan has remained relatively stable. Malaysian industry insiders and scholars analyze that semiconductors and IC products have become the key drivers of Taiwan-Malaysia trade, and bilateral economic and trade relations will continue to deepen, driven by the semiconductor-related supply chain.
Media outlets such as "The Star" and "China Press" reported that a survey by the Federation of Malaysian Manufacturers (FMM) showed that over two-thirds of manufacturers believe production and operating costs have increased by at least 10%. Against this backdrop, exports in March this year were affected by the Middle East conflict and logistics disruptions, leading to a slowdown in momentum, but exports to Taiwan and the US continued to grow, with electronic and electrical products being the main key. Malaysia's exports to Taiwan in March increased by RM 3.1 billion (approximately NT$ 24.8 billion).
TECOBAR, a subsidiary of the major electrical appliance manufacturer TECO, opened its new factory in Penang, Malaysia, yesterday. TECO plans to achieve a 20% market share in non-server related AI data centers and electromechanical equipment supply and turnkey projects in Asian markets outside of mainland China.
Wang Kuan Hung, a technology materials industry expert who has had a factory in Penang, a semiconductor hub, for many years, stated in an interview that Penang primarily focuses on packaging and testing in the global semiconductor supply chain. In recent years, as major Taiwanese manufacturers continue to expand their investments, the cluster effect of the industrial chain has become increasingly evident, with companies such as ASE Technology Holding, Taiwan Union Technology Corporation, and TECO increasing their presence. Most of the products completed after packaging and testing by these companies are then re-exported to Taiwan for back-end assembly, forming a cross-border division of labor system.
He further pointed out that a large number of semiconductor products return to Taiwan after completing mid-to-downstream processes locally, driving bilateral trade. As the demand for artificial intelligence and high-performance computing boosts global chip demand, Taiwan's upstream design and manufacturing advantages, combined with Malaysia's packaging and testing capacity, create a clear upstream-downstream division of labor relationship between Taiwan and Malaysia in the semiconductor supply chain.
Wang Kuan Hung believes that Taiwan possesses a complete supply chain advantage from design, manufacturing to packaging and testing, making it one of the few economies in the world capable of integrating the entire chain. Malaysia ranks 4th globally in the packaging and testing sector, and with continuous expansion of investment by Taiwanese manufacturers, the bilateral industrial chain linkage and trade dependence will further increase.
From the perspective of the overall trade structure, Professor Chin-Yoong Wong, an economics professor at Universiti Tunku Abdul Rahman (UTAR), analyzed that the growth in Malaysia's exports to Taiwan is still primarily driven by semiconductors and integrated circuit products. In addition to electronic products, bilateral trade also covers petroleum-related products, machinery and equipment, and optical and scientific instruments, but semiconductors remain the most critical category.
He pointed out that Taiwan is currently one of Malaysia's important export markets, and bilateral trade shows a high degree of complementarity; in terms of supply chain division of labor, Taiwan is at the upstream design and manufacturing end, while Malaysia leans towards mid-to-downstream packaging and testing, reflecting a relatively high dependence on Taiwan's semiconductor industry.
Chin-Yoong Wong emphasized that in recent years, affected by geopolitical changes, US-China trade friction, and supply chain restructuring, Southeast Asia has become an important base for corporate layouts. Malaysia, as a neutral manufacturing base, is expected to continue strengthening its economic and trade ties with Taiwan and the EU under the trend of 'non-China' and 'non-US' supply chain adjustments. (Editor: Hsieh Yi-hsuan) 1150430
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(Central News Agency reporter Huang Tzu-chiang, Kuala Lumpur, 30th) The Middle East conflict has disrupted global logistics, affecting Malaysia's overall export performance in March, but trade with Taiwan has remained relatively stable. Malaysian industry insiders and scholars analyze that semiconductors and IC products have become the key drivers of Taiwan-Malaysia trade, and bilateral economic and trade relations will continue to deepen, driven by the semiconductor-related supply chain.
Media outlets such as "The Star" and "China Press" reported that a survey by the Federation of Malaysian Manufacturers (FMM) showed that over two-thirds of manufacturers believe production and operating costs have increased by at least 10%. Against this backdrop, exports in March this year were affected by the Middle East conflict and logistics disruptions, leading to a slowdown in momentum, but exports to Taiwan and the US continued to grow, with electronic and electrical products being the main key. Malaysia's exports to Taiwan in March increased by RM 3.1 billion (approximately NT$ 24.8 billion).
TECOBAR, a subsidiary of the major electrical appliance manufacturer TECO, opened its new factory in Penang, Malaysia, yesterday. TECO plans to achieve a 20% market share in non-server related AI data centers and electromechanical equipment supply and turnkey projects in Asian markets outside of mainland China.
Wang Kuan Hung, a technology materials industry expert who has had a factory in Penang, a semiconductor hub, for many years, stated in an interview that Penang primarily focuses on packaging and testing in the global semiconductor supply chain. In recent years, as major Taiwanese manufacturers continue to expand their investments, the cluster effect of the industrial chain has become increasingly evident, with companies such as ASE Technology Holding, Taiwan Union Technology Corporation, and TECO increasing their presence. Most of the products completed after packaging and testing by these companies are then re-exported to Taiwan for back-end assembly, forming a cross-border division of labor system.
He further pointed out that a large number of semiconductor products return to Taiwan after completing mid-to-downstream processes locally, driving bilateral trade. As the demand for artificial intelligence and high-performance computing boosts global chip demand, Taiwan's upstream design and manufacturing advantages, combined with Malaysia's packaging and testing capacity, create a clear upstream-downstream division of labor relationship between Taiwan and Malaysia in the semiconductor supply chain.
Wang Kuan Hung believes that Taiwan possesses a complete supply chain advantage from design, manufacturing to packaging and testing, making it one of the few economies in the world capable of integrating the entire chain. Malaysia ranks 4th globally in the packaging and testing sector, and with continuous expansion of investment by Taiwanese manufacturers, the bilateral industrial chain linkage and trade dependence will further increase.
From the perspective of the overall trade structure, Professor Chin-Yoong Wong, an economics professor at Universiti Tunku Abdul Rahman (UTAR), analyzed that the growth in Malaysia's exports to Taiwan is still primarily driven by semiconductors and integrated circuit products. In addition to electronic products, bilateral trade also covers petroleum-related products, machinery and equipment, and optical and scientific instruments, but semiconductors remain the most critical category.
He pointed out that Taiwan is currently one of Malaysia's important export markets, and bilateral trade shows a high degree of complementarity; in terms of supply chain division of labor, Taiwan is at the upstream design and manufacturing end, while Malaysia leans towards mid-to-downstream packaging and testing, reflecting a relatively high dependence on Taiwan's semiconductor industry.
Chin-Yoong Wong emphasized that in recent years, affected by geopolitical changes, US-China trade friction, and supply chain restructuring, Southeast Asia has become an important base for corporate layouts. Malaysia, as a neutral manufacturing base, is expected to continue strengthening its economic and trade ties with Taiwan and the EU under the trend of 'non-China' and 'non-US' supply chain adjustments. (Editor: Hsieh Yi-hsuan) 1150430
Choose to stand with the facts. Every sponsorship you make is a force to protect press freedom.
Download the Central News Agency's "First-hand News" APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, publicly broadcast, publicly transmitted, or utilized without authorization.