Semiconductor shortage: hopes rise as key player Malaysia turns corner in Covid battle

The country has a crucial but underappreciated role in global supply chains, one that was highlighted when carmakers like Toyota and Ford had to cut production due to pandemic-induced bottlenecks

With the surge in infections having peaked, movement restrictions are being eased. But experts caution that problems in other Asian economies, such as Taiwan and Vietnam, will continue to take a toll

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Malaysia plays a key but underappreciated role in the world’s semiconductor supply chains.

Published: 9:30am, 13 Sep 2021

It is not just Malaysia’s 33 million people who are breathing a collective sigh of relief as the country slowly turns a corner in its long fight to contain a devastating surge in Covid-19.

Having been hit hard by factory closures and staff shortages in Malaysian facilities that test and package semiconductors, the likes of Toyota, Ford, General Motors and Skoda Auto are also likely to be toasting the gradual reopening of the economy.

Malaysia’s little-known but crucial role in the semiconductor industry came into focus in recent months as these top carmakers drastically reduced production targets citing pandemic-induced bottlenecks in Malaysia and neighbouring Thailand.

From May, the country’s Covid-19 situation had begun to deteriorate sharply, with the total active caseload tripling from 80,000 to the present level of nearly 250,000. Some 85 per cent of the more than 19,000 Covid-19 related deaths also took place during this period.

But the surge has now passed its peak, and officials have begun relaxing movement control rules.

From Friday, for instance, the Klang Valley – the country’s most populous region and key industrial heartland – will move into phase two of a four-step national recovery plan.

Azmin Ali, the minister for international trade and industry, told CNBC on Tuesday that the government would begin treating Covid-19 as endemic by the end of October.