Malaysia goes all out to woo US electronics giants

Deputy trade minister Ong Kian Ming (centre) in Penang today.

GEORGE TOWN: Malaysia will increase its efforts to take advantage of the US-China trade war by persuading US electrical and electronics companies to relocate their supply chain operations to Malaysia.

Deputy International Trade and Industry Minister Ong Kian Ming said Penang had been a key spot for E&E investors, with the existing environment proving to be very attractive to these companies.

He said this when asked about the US-Asean Business Council’s view that the trade war with China has “accelerated” the shift of US companies and supply chain operations to neighbouring countries in order to evade tariffs.

“In the past, these American companies wanted to expand to China but now, they want to diversify their business by expanding here.

“Existing players have been expanding their capacity even before the trade war,” Ong said at a press conference at the Innovate Malaysia Design Competition hosted by Keysight Technologies here today.

He said he met Penang’s 10 major E&E players and the state’s investment agency, InvestPenang. He said some of these players are the main suppliers to US companies and they could potentially expand here.

He said some of the companies are not American. Taiwanese electronics company Hotayi for example, expanded their business in Batu Kawan, Penang in 2017 and reported increased orders within seven months.

Ong also spoke about the expanding scope of Global Business Services, with more international companies opening such centres in Kuala Lumpur and Penang to offer shared services and outsourcing under one roof to improve delivery and reduce costs.

Ong said China-based companies are eager to open GBS centres here to tap into the lucrative Southeast Asian market, with a shift away from Singapore to Malaysia so as to get closer to a larger Indonesian market.

“We want to let the Chinese know that Malaysia is a better option, in terms of talent pool and cost base.”

US-Asean Business Council senior vice president Michael W Michalak was bullish on the possibility of more American companies shifting their businesses here.

He told reporters this morning that many US companies are moving their supply chain operations from China to neighbouring countries and the Asean region, due to tariffs imposed by the US.