As the global semiconductor landscape shifts amid rising U.S.-China trade tensions, Malaysia must rethink its semiconductor strategy by moving up the value chain. Dr.Juita Mohamad suggests exploring trade creation, and leveraging existing partnerships.
00:00As the global semiconductor landscape shifts amid escalating U.S.-China trade tensions, Malaysia must rethink its strategy.
00:09According to Dr. Juhita Mohamad, consultant at the UN Trade and Development, this means moving up the value chain, exploring trade creation, and making full use of existing partnerships.
00:22So, this has already been in the works. Malaysia has aspirations to move up the value chain in the semiconductor industry.
00:34For now, again, we're at the back end where we're only testing and assembling the semiconductors for exports.
00:46There has been talks and also there were many grants and incentives given for companies, local companies, Malaysian companies to move up the value chain to produce higher value added products like chip or wafer design.
01:03So, this is, again, this is a product diversification strategy whereby instead of competing with lower value added products with China per se, we should move up the value chain and produce products with higher local content.
01:27So, again, that's number one. Number two is tapping on trade creation.
01:33And here is where, again, we are, if, again, there's going to be higher tariffs, then there will be dampening of demands from the U.S.
01:46So, again, we need to find other possible markets that can possibly or closely substitute the American market, which is almost impossible.
01:56But, again, as a proactive measure, exporters need to look at other markets.
02:07So, again, this is where I emphasize that trade creation is needed and trade creation can be with existing partners, but those partners with untapped potential.
02:21So, this is, again, so this is, again, within our many, many different free trade agreements.
02:26We have signed on to many, many free trade agreements, but unfortunately, most of them have been underutilized.
02:33So, with higher tariff rates introduced by the U.S., we can look at our partners within the RCEP, that's ASEAN Plus 6, we can look at other partners within CBTPP, and again, we can look at our newly formed regional cooperation called the BRICS.
03:02So, again, there are other untapped partners that we can approach to either be the destination country for our exports, but it can also be sources of new partners when we are thinking of reconfigurating the supply chain of the semiconductors.
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