Safeguarding Malaysia’s digital future through technology sovereignty

 As technology becomes increasingly intertwined with our daily lives, the ability to make independent choices will matter more than ever.

From Chang Lih Kang

In June, the science, technology and innovation ministry said in a parliamentary reply that it was leading the government’s efforts to develop a National Technology Sovereignty Framework.

But what does technology sovereignty mean to everyday Malaysians, when almost every chip, cloud service and line of code we depend on comes from elsewhere?

It does not mean producing everything ourselves. It means having the choice and control over critical technologies, data and infrastructure so that no external party can unilaterally dictate our options.

If geopolitical tensions disrupt supply chains, Malaysia must have alternatives. If a major cyber incident occurs, our hospitals, banks, businesses and government systems must continue operating. We also need the expertise and institutions to decide how emerging technologies should be adopted and governed.

Ultimately, technology sovereignty protects Malaysia’s freedom of choice in the digital world.

The Huawei episode illustrates why this matters. Washington restricted Huawei’s access to US technology, including advanced semiconductors, and urged allies to reconsider Chinese equipment in their 5G networks. Dependence is not simply about whether we can afford technology, but whether we can still access it when geopolitical circumstances change.

Taiwan offers another lesson. Its semiconductor industry, led by companies such as TSMC, sits at the heart of global advanced-chip production. Yet this concentration also creates vulnerabilities, as industries worldwide depend on a relatively small number of facilities.

I am not arguing against globalisation. Global supply chains have brought Malaysia investment, jobs, technology transfer and access to markets. But being connected to the world is not the same as being resilient to it.

South Korea demonstrates how sustained investment in strategic capabilities can strengthen technological independence. By developing its semiconductor, electronics and manufacturing industries, it has produced global leaders such as Samsung and SK Hynix, including in memory chips critical to advanced artificial intelligence systems.

India offers a different model. Its digital public infrastructure, including digital identity and payment platforms, gives it greater control over key parts of its digital economy. It is also investing in semiconductor design, manufacturing and packaging. Its experience shows that sovereignty does not require complete self-sufficiency, but strategic capabilities in selected areas.

China has built domestic strengths across telecommunications, cloud computing, payments and artificial intelligence. Yet it continues to face challenges in producing the most advanced semiconductors and accessing sophisticated chipmaking equipment. Even a country with enormous resources cannot quickly replace every critical technology when external access is restricted.

For countries such as Malaysia, dependence without alternatives carries serious consequences. Wars, sanctions, export controls and corporate decisions can disrupt access to technology, components and digital infrastructure. Having the money to buy something does not guarantee that we can obtain it.

Malaysia starts from a relatively strong position. We have more than 50 years of experience in electronics and semiconductors, established industrial clusters in Penang and Kulim, and account for around 13% of global chip assembly, testing and packaging. We are also the world’s sixth-largest semiconductor exporter.

However, much of this capacity operates within multinational facilities. We host significant production, but need to build greater locally owned capabilities. Advanced packaging, increasingly important for AI chips, is one area where Malaysia must strengthen its position.

Our research base also needs improvement. Gross expenditure on research and development stands at around 1% of gross domestic product, compared with a much higher share in South Korea.

These gaps expose Malaysia to four key risks.

First, security: critical government and infrastructure systems must remain operational during geopolitical tensions, cyberattacks and technological disruptions.

Second, economic resilience: disruptions to semiconductors, cloud services or network equipment could affect manufacturing, finance, healthcare, logistics and communications.

Third, data governance: sensitive government, health, financial and commercial data must be managed in accordance with Malaysian law and national interests.

Fourth, competitiveness: countries that develop technological capabilities capture more value through intellectual property, skilled employment, research, start-ups and globally competitive companies. Those that mainly consume technology capture less.

The framework should therefore identify technologies where excessive dependence could threaten Malaysia’s security, economy or ability to govern. In these areas, we should build domestic capabilities, diversify suppliers, maintain strategic reserves where appropriate and establish trusted partnerships.

Elsewhere, we should remain open.

Technology sovereignty is not protectionism, economic nationalism or a retreat from the global economy. Foreign investment, multinational companies and international research partnerships have contributed enormously to Malaysia’s development. We must continue welcoming their capital, expertise, technology and access to global markets.

Our goal is not to own everything. It is to ensure that Malaysia cannot be held hostage by dependence on anything critical to its security, economy and future.

As technology becomes increasingly intertwined with our daily lives, the ability to make independent choices will matter more than ever.

Malaysia’s digital future should not simply be something we take for granted. We must build the capabilities to shape it, the resilience to protect it and the sovereignty to decide our own path forward. - FMT

Chang Lih Kang is the science, technology, and innovation minister

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.