Kuala lumpur: Malaysia needs to enhance its relations with Japan as a weapon to boost competitiveness in the global market and increase investment in high-end niche technology industries, said key speakers at the New Japan-Malaysia Industrial Cooperation Seminar.

According to BERNAMA News Agency, Malaysia Semiconductor Industry Association (MSIA) president, Datuk Seri Wong Siew Hai, emphasized that Japan is a major supplier of semiconductor silicon wafers, accounting for about 53 percent of the global market share. Wong highlighted Japan's comprehensive technology, spanning from integrated circuit design to the end products of the semiconductor industry, as an opportunity for Malaysia to enhance collaboration in order to strengthen its position in niche technologies and achieve its semiconductor strategy goals. He further noted Japan's indispensable role in every part of the supply chain in the industry.

Wong expressed confidence in Malaysia's ability to attract more foreign direct investment (FDI) from Japan, as it is a preferred location shielded from global risks. He urged Malaysia to seize this opportunity to attract more investments from Japan, particularly in wafer fabs (semiconductor processing factories). He also stressed the importance of diversifying supply sources due to ongoing geopolitical tensions and the need to reduce reliance on traditional markets such as China and the United States.

Wong also emphasized the necessity for the government to improve the ease of doing business to facilitate companies. He acknowledged the challenges faced by the industry, including inflationary pressures, particularly if geopolitical tensions persist, leading to higher oil prices. Wong noted that despite these challenges, Malaysia has the potential to emerge stronger by becoming more competitive globally and staying ahead of other countries.

Meanwhile, ASEAN Business Advisory Council (ASEAN-BAC) Malaysia chairman, Tan Sri Mohamed Nazir Abdul Razak, highlighted the opportunity to leverage Malaysia's strong bond with Japan, which is based on 70 years of diplomatic relations that have endured through various crises. He encouraged promoting Malaysia's vast opportunities to international investors, supported by political stability, existing ecosystems, and a skilled talent pool, as they reconsider repositioning their supply chains and investments.

Kazuto Suzuki, director of the Institute of Geoeconomics, a Japan-based independent think tank, emphasized that government stability reassures investors. He acknowledged that while exchange rate risks exist, they are mitigated by political stability and incentives such as lower taxes, which attract investors. Suzuki, also a professor at the University of Tokyo, Graduate School of Public Policy, stressed that predictability is a key concern for investors, and providing advance notice of policy changes ensures transparency and allows companies to mitigate risks.