Malaysia, US to Sign Supply Chain Cooperation Agreement

January 2022

Malaysia and the United States will discuss a memorandum of cooperation (MoC) in early 2022 to enhance transparency, resilience, and security in the semiconductor and manufacturing sector supply chains. This joint statement was made in response to the shortage of semiconductor chips and supply disruption caused by Covid-19 related restrictions.

Malaysia’s chip assembly sector, which contributes to more than a tenth of global trade worth more than USD 20 billion, has anticipated supply constraints until 2023. The MoC is therefore critical to address the current and long-term supply chain concerns, as the country plays a significant role in global supply chains for semiconductors, electronics, health products, and other major goods. The agreement is also in line with Malaysia’s National Investment Aspirations that aims at comprehensive reforms to support enablers of high-value, high-technology, knowledge, capital, skills-intensive, and high-income employment.

Both countries also intend to collaborate in areas where a mutually beneficial supply structure exists including climate change-mitigating products, digital trade, medical devices, electronics, and other related areas. It has been identified that Malaysia’s energy and environment industry would be a strategic sector to strengthen its sustainable growth. Human resources capacity in Malaysia would be another key collaboration area related to high-impact, high-tech investment in coherence with the US’ technological advancement in the field.

(Sources: The Edge Markets; Malaysia Kini; U.S. Department of Commerce)

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