Malaysia draws $86 billion a year as firms shift supply chains

PETALING JAYA, Malaysia (MNTV) — Malaysia has drawn approved investments averaging $86.1 billion a year from 2022 to 2025, a level economists say reflects both strong fundamentals and deliberate policy, The Star reported.

The boom has been driven partly by global supply-chain realignment, as foreign firms diversify away from concentrating operations in any single country — the “China Plus One” strategy — with Malaysia a favored alternative, said Lee Heng Guie of the Socio-Economic Research Centre.

Domestic policies have added pull, he said, including national plans on industry, energy transition, and semiconductors that align with global demand for high technology, chips, data centers, and AI.

The investments were broad-based across thousands of projects rather than skewed by one giant deal, Lee said, though he noted Malaysia’s foreign-investment inflows have weakened relative to Vietnam and remained below Indonesia through most of the period.

Alvin Desfiandi of the Centre for Market Education said the figures lean heavily on a cluster of digital, AI, and projects tied to Johor, the state bordering Singapore, rather than an even nationwide boom.

Future gains, he argued, are more likely to come from steady execution and a broader pipeline than from another burst of headline mega-deals.

The strongest driver, he said, has been supply-chain reallocation into Southeast Asia, but Malaysia converted it into investment through its own policy mix — including the Johor-Singapore Special Economic Zone and its established semiconductor base.

“This is not just ‘luck,'” he said.