CAEP Calls for Closer Ties Between Auto and Chip Sectors

At the first meeting of the Council of Automotive Eminent Persons (CAEP), Deputy MITI Minister YB Liew Chin Tong emphasised Malaysia’s pressing need to integrate its thriving semiconductor and automotive industries.

The CAEP, chaired by MITI Minister Tengku Zafrul Aziz, has been formed to re-evaluate and transform the country’s automotive sector in response to global shifts toward electric, connected, and autonomous vehicles.

Although Malaysia is home to a well-established semiconductor ecosystem and a growing automotive industry, both of which collectively support hundreds of thousands of jobs, Liew noted the absence of meaningful synergy between the two.

“There is no significant horizontal integration between our semiconductor and automotive industries,” he said. “This is despite the fact that modern vehicles are increasingly defined by semiconductors, particularly in the context of connected, autonomous, shared, and electric mobility trends.”

Malaysia currently plays a critical global role in semiconductor manufacturing, particularly in chip packaging, testing, and assembly. It is also active in producing automotive-grade chips, a high-growth segment seen as vital to the future of mobility.

Bridging the gap between the two sectors, Liew said, could significantly strengthen Malaysia’s position across both industries. As vehicles become more reliant on software and electronics, the integration of local capabilities can offer both economic and strategic advantages.

“The opportunity lies in aligning the strengths of both sectors. This includes facilitating collaboration between OEMs, Tier 1 suppliers, and chipmakers, as well as building domestic capabilities across the mobility technology value chain,” he explained.

He further highlighted that Malaysia’s reliance on internal combustion engine (ICE) vehicles has contributed to a high national oil import bill. This, in turn, strengthens the case for accelerating the electric vehicle transition as a means of ensuring long-term energy security.

In this context, the appointment of Petronas CEO Tengku Muhammad Taufik as Alternate Chair of CAEP reflects the government’s broader ambition. His leadership is expected to support a more integrated national strategy that links energy, automotive, and semiconductor development with the aim of returning Malaysia to the ranks of major oil-exporting nations.

Industry observers have welcomed these developments as timely. With global automakers pivoting to EVs and smart mobility solutions, supply chains are being reorganised around advanced electronics and chip technologies.

Malaysia, already a crucial part of this global value chain, is well positioned to benefit from this provided it pursues deliberate cross-sector collaboration and strong policy direction.

The CAEP is expected to outline a national roadmap in its next phase of work, with key focus areas likely to include innovation clusters, talent development, and co-located industrial ecosystems.

As the global automotive landscape continues to evolve, Malaysia is not only working to keep pace but is seeking to lead in high-value areas, powered by its semiconductor expertise and growing automotive ambition.