Despite the uncertain growth path over the last 7 years, Malaysia’s compounded annual growth rate CAGR (2010- 2017) in high technology exports remains positive at 1.73%. However, when benchmarked against the rest of the world, Malaysia’s growth is much slower at a CAGR (2010-2017) of 2.67%. This is an indication that Malaysia’s high technology industry is struggling to keep-up with the rapid expansion of the world’s market for high technology merchandise. Malaysia’s high technology merchandise was exported globally, totalling 190 countries in 2018. The largest importer of Malaysia’s high technology exports in 2018 was Singapore, followed by Hong Kong, amounting to USD15.52 billion and USD15.42 billion, respectively. Most of Malaysia’s high technology exports are destined for East and South Asian destinations, specifically Singapore, Hong Kong, China, Thailand, Japan, Taiwan, Korea, Vietnam, and India. Collectively, these 9 destinations imported 70.39% of Malaysia’s high technology export merchandise worth USD63.60 billion. Other major importers of Malaysia’s high technology exports include the U.S.A, Germany, the Netherlands, Mexico, Australia, and France, totalling USD20.80 billion or 23.02% worth of high technology merchandise from Malaysia. Malaysia’s high technology merchandise consists of mostly electronics, integrated circuits, telecommunication devices, and computer office machines, which accounts for 87.64% (or USD79.19 billion) of the total high technology merchandise exported in 2018. They include microprocessors (or CPUs), other integrated circuits (ICs), light-emitting diodes (LEDs), computers, semiconductor medias (like SSDs), and storage units (like HDDs). However, most of these top exporting merchandises are intermediate products (parts and components) that need to be further value added to produce the intended final products in other countries. Country Benchmarking From a global perspective, China is leading the export of high technology merchandise to the world (2017). With a total export value of USD654 billion, China is way ahead of her nearest rival Germany, followed at a distance by South Korea, the U.S.A, and Taiwan.
In 2017, Malaysia’s world ranking in high technology exports is at position 11, an improvement by one position from 2016. However, this transition from position 12 to 11 should be considered a recovery, as opposed to an improvement, since Malaysia was consistently ranked at position 11 over the last 7 years, except for 2016. The most notable change in 2017’s ranking is Vietnam, where it could leap-frog 4 positions from position 14 in 2016 to position 10 in 2017, surpassing the U.K., Malaysia, Switzerland, and Mexico. Overall, countries that appeared to be on the up trend in the ranking board are Taiwan, Vietnam, France and South Korea. Those on the down trend are Japan, the U.K., and Switzerland. Many developing countries are also pursuing high technology export strategies todevelop their economies. These competing economies appear, moving much faster than Malaysia, most notably Vietnam and Mexico. Vietnam, for instance, experienced a phenomenal growth in high technology exports with a CAGR (2010-2017) of 42.97%. Vietnam grew from USD6 billion in 2010 to USD74 billion in 2017, a 12-fold increase in high technology exports within 7 years. In 2017, Vietnam has finally overtaken Malaysia in terms of high technology exported by a slight margin. Most Vietnam’s high technology exports are telecommunication devices, focusing mostly on mobile telephones. In 2017, 40.16% of Vietnam’s high technology exports were mobile telephones, amounting to USD 29.76 billion. That said, Vietnam’s exports of electronics integrated circuits are also growing rapidly at a rate of 49.66% CAGR (2010-2017). If Vietnam is to continue its current growth trajectory, there is a possibility that Malaysia’s current leading position in the export of electronics integrated circuits, will be overtaken by Vietnam within the next 8 years. Malaysia’s 2018 performance in the export of high technology merchandise is commendable, and a new milestone was established. However, Malaysia’s lacklustre growth performance over the last 8 years is hampering it from competing effectively against many fast-moving emerging economies, like Vietnam. Besides competing economies, there is also a need for Malaysia to keep-up with the world’s growth in demand for high technology merchandise.
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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology
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