Penang: Penang, through its state investment agency InvestPenang, is actively conducting investment and trade missions to foreign countries to reduce the impact of the United States (US) tariff hike on the state’s economy. Chief Minister Chow Kon Yeow stated that the initiative aims to attract new investors and explore market opportunities in regions including Japan, South Korea, Taiwan, Europe, China, and Singapore.
According to BERNAMA News Agency, InvestPenang has participated in several international expos such as SEMICON Southeast Asia, Kumamoto Industrial Revitalisation Expo, World Fujian Convention and Exhibition, and the World Congress on Innovation and Technology (WCIT). These efforts are intended to enhance Penang’s visibility in new markets. Chow provided this information in response to a question from Gooi Hsio Leong (PH-Bukit Tengah) during the Penang State Legislative Assembly sitting.
To bolster Penang’s position in the semiconductor value chain, Chow emphasized that the state government will adhere to the National Semiconductor Strategy (NSS) guidelines and the Penang Silicon Design @5km+ initiative. He highlighted the nurturing of local champions in integrated circuit (IC) design, with a projected investment of RM120 million over the next five years for the Penang Silicon Design@5km+ initiative.
Chow also mentioned that state and federal governments have established matching grants to advance the initiative, positioning Malaysia, particularly Penang, as a leader in the IC design ecosystem. This collaboration is anticipated to drive innovation and economic growth.
To attract and support IC design companies in Penang, the state government is offering an incentive package scheme comprising subsidies worth up to RM2 million annually for three years to both local and foreign IC design companies based in Malaysia. However, the initiative’s success hinges on funding allocations from the federal government to ensure full implementation and support for industry growth.
Furthermore, Chow stated that the state government is collaborating with the federal government to develop a Trade Adaptation Toolkit for industry players. This toolkit will include practical resources to help them leverage alternative markets under regional trade agreements within ASEAN, as well as existing agreements like the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Chow noted that Penang is particularly vulnerable to reciprocal tariffs, as the US is the second-largest export destination for Penang, accounting for RM76 billion or 17 percent of the state’s total export value in 2023. The US is also Penang’s main trading partner, with a trade surplus of RM57.7 billion in 2024. Therefore, the implementation of these tariffs could have a significant impact on Penang and other Malaysian states.