The AI boom has turned a handful of Asian firms into global superstars, yet Malaysia has emerged as an unassuming AI winner. Government data shows the economy grew 6% in Q2, driven by 7.5% manufacturing expansion tied to chipmaking and 6.6% construction growth from data‑centre development.

Malaysia’s semiconductor back‑end processes account for 13% of the global market, second only to China, and the sector represents 40% of the country’s exports. International firms have pursued a “China plus one” strategy, relocating factories to Malaysia to hedge against geopolitical risks, causing foreign direct investment to surge 41% in 2025.

Johor has become a fast‑growing data‑centre hub, attracting tens of billions from TikTok, Nvidia and Microsoft. While the state enjoys a special economic zone with Singapore, concerns over energy and water use have sparked protests. The country also faces scrutiny over possible illicit chip flows to China, prompting tighter regulations.