Malaysia is on course for its biggest year ever as an exporter of chips and electronics. The plants that feed the global artificial intelligence boom are running hot, and the country's export numbers are climbing faster than the industry itself expected. There is a second, more local side to the same story, and it is worth being precise about: the strain the boom is putting on the national power grid.
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What you need to know
- Malaysia's electrical and electronics (E&E) exports are now forecast to pass RM900 billion in 2026, up from RM711 billion in 2025.
- The country is one of the four largest net exporters of AI-related hardware, alongside South Korea, Taiwan and Thailand.
- Data centres, not the export factories, are the fast-growing electricity draw: from about 7 per cent of national power in 2026 to a projected 31 per cent by 2035.
A record the forecasts keep chasing
Wong Siew Hai, chairman of the Malaysia Semiconductor Industry Association, now expects the country's E&E exports to pass RM900 billion, roughly US$223 billion, this year. That is up from the more than RM800 billion he had forecast only in the second quarter. Speaking to Bloomberg in comments reported by The Star, he said that on current momentum shipments would "probably breach RM900bil".
The size of the projected jump is clearer across three years. E&E exports were RM601 billion in 2024 and RM711 billion in 2025, both actual results. A forecast of RM900 billion for 2026 would mean a rise of close to RM190 billion in a single year, well above the roughly RM110 billion added between those two completed years. The demand behind it is the same one filling headlines everywhere: the chips, servers and components that go inside AI hardware.
Why the AI wave lands in Malaysia
Malaysia sits in the middle of the AI supply chain rather than at its glamorous end. It is one of the four largest net exporters of AI-related hardware in the world, alongside South Korea, Taiwan and Thailand, according to IMF analysis cited by The Star. Its plants, many of them in and around Penang, handle a large share of the assembly, testing and advanced packaging that turns raw silicon into finished parts. It is the kind of packaging work we covered when Google turned to Penang for its Marvell chips.
The part your power bill notices
The boom has a physical cost, and it is measured in electricity, though not quite where the export headline points. The factories that assemble and test chips are not the heavy draw. Data centres are. They used about 7 per cent of Malaysia's power in 2026 and, on official projections, will draw close to 31 per cent by 2035, Malay Mail reported, with Johor expected to hold close to 60 per cent of national data centre capacity by 2030. That is a separate pressure from the one households already feel: base tariffs rose for everyone on the peninsula under a 2025 reform, a broad change rather than the work of any single industry. We looked at a subtler version of the squeeze, where data centre demand pushes up the price of the graphics cards ordinary buyers want, in our report on the hidden cost of the data centre boom.
From assembling chips to designing them
The bigger question is whether Malaysia moves up the chain. The government's "Made by Malaysia" ambition under the 13th Malaysia Plan wants the country to design and own more of what it currently only assembles, rather than remaining the place where other people's chips are put together. Export records built on assembly are welcome, and they are real money and real jobs. They are also the easiest part of the industry for a rival country to bid away.
For now the numbers point one way, and firmly. The test is whether a record export year turns into higher-value work and local ownership, or simply a heavier load on the grid that keeps the servers running.
Images courtesy of Laura Ockel, Anne Nygård and Winston Chen on Unsplash.
