Geopolitical competition and national industrial policies are continuously reshaping the global semiconductor division of labor. Leveraging its comprehensive industrial advantages, Malaysia has steadily absorbed mature packaging capacity from China, gradually triggering supply instability in the domestic back-end manufacturing sector. Although China ranks among the world leaders in packaging and testing (P&O) industry scale, its production capacity remains geographically concentrated, and there are notable gaps in high-end supporting capabilities. The outflow of mature packaging operations directly undermines the foundation for local technological advancement. Existing research has not fully mapped the transmission process of this targeted capacity shift or provided regionally tailored risk management strategies aligned with China’s industrial disparities. Based on China’s current P&O industry layout, technological development status, and Malaysia’s industrial absorption characteristics, this study analyzes the internal logic through which capacity relocation impacts supply chain resilience, dissects multi-layered risk transmission pathways, distinguishes between short-term market fluctuations and long-term value chain restructuring, and objectively identifies structural weaknesses that amplify risk diffusion. Findings indicate that the outflow of mature packaging capacity simultaneously compresses the operating space of upstream and downstream suppliers, reduces investment in advanced process R&D, and amplifies external policy shocks due to multinational corporations diversified global footprint. To address real-world challenges such as imbalanced domestic industrial distribution, insufficient technological self-reliance, and overly centralized overseas expansion models, optimizing tiered domestic capacity allocation, advancing full-chain breakthroughs in advanced packaging technologies, and diversifying offshore low-value-added processes can effectively buffer the disruption caused by capacity relocation, thereby strengthening the semiconductor supply chain’s autonomy, resilience, and recovery capability.
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Xiong W, Wu D D, Yeung J H Y. Semiconductor supply chain resilience and disruption: insights, mitigation, and future directions [J]. International Journal of Production Research, 2025, 63(9): 3442-3465.
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Tianyao, S. (2026). Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Science Innovation, 14(5), 175-184. https://doi.org/10.11648/j.si.20261405.14
Tianyao, S. Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Sci. Innov.2026, 14(5), 175-184. doi: 10.11648/j.si.20261405.14
Tianyao S. Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Sci Innov. 2026;14(5):175-184. doi: 10.11648/j.si.20261405.14
@article{10.11648/j.si.20261405.14,
author = {Shi Tianyao},
title = {Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies},
journal = {Science Innovation},
volume = {14},
number = {5},
pages = {175-184},
doi = {10.11648/j.si.20261405.14},
url = {https://doi.org/10.11648/j.si.20261405.14},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.si.20261405.14},
abstract = {Geopolitical competition and national industrial policies are continuously reshaping the global semiconductor division of labor. Leveraging its comprehensive industrial advantages, Malaysia has steadily absorbed mature packaging capacity from China, gradually triggering supply instability in the domestic back-end manufacturing sector. Although China ranks among the world leaders in packaging and testing (P&O) industry scale, its production capacity remains geographically concentrated, and there are notable gaps in high-end supporting capabilities. The outflow of mature packaging operations directly undermines the foundation for local technological advancement. Existing research has not fully mapped the transmission process of this targeted capacity shift or provided regionally tailored risk management strategies aligned with China’s industrial disparities. Based on China’s current P&O industry layout, technological development status, and Malaysia’s industrial absorption characteristics, this study analyzes the internal logic through which capacity relocation impacts supply chain resilience, dissects multi-layered risk transmission pathways, distinguishes between short-term market fluctuations and long-term value chain restructuring, and objectively identifies structural weaknesses that amplify risk diffusion. Findings indicate that the outflow of mature packaging capacity simultaneously compresses the operating space of upstream and downstream suppliers, reduces investment in advanced process R&D, and amplifies external policy shocks due to multinational corporations diversified global footprint. To address real-world challenges such as imbalanced domestic industrial distribution, insufficient technological self-reliance, and overly centralized overseas expansion models, optimizing tiered domestic capacity allocation, advancing full-chain breakthroughs in advanced packaging technologies, and diversifying offshore low-value-added processes can effectively buffer the disruption caused by capacity relocation, thereby strengthening the semiconductor supply chain’s autonomy, resilience, and recovery capability.},
year = {2026}
}
TY - JOUR
T1 - Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies
AU - Shi Tianyao
Y1 - 2026/09/04
PY - 2026
N1 - https://doi.org/10.11648/j.si.20261405.14
DO - 10.11648/j.si.20261405.14
T2 - Science Innovation
JF - Science Innovation
JO - Science Innovation
SP - 175
EP - 184
PB - Science Publishing Group
SN - 2328-787X
UR - https://doi.org/10.11648/j.si.20261405.14
AB - Geopolitical competition and national industrial policies are continuously reshaping the global semiconductor division of labor. Leveraging its comprehensive industrial advantages, Malaysia has steadily absorbed mature packaging capacity from China, gradually triggering supply instability in the domestic back-end manufacturing sector. Although China ranks among the world leaders in packaging and testing (P&O) industry scale, its production capacity remains geographically concentrated, and there are notable gaps in high-end supporting capabilities. The outflow of mature packaging operations directly undermines the foundation for local technological advancement. Existing research has not fully mapped the transmission process of this targeted capacity shift or provided regionally tailored risk management strategies aligned with China’s industrial disparities. Based on China’s current P&O industry layout, technological development status, and Malaysia’s industrial absorption characteristics, this study analyzes the internal logic through which capacity relocation impacts supply chain resilience, dissects multi-layered risk transmission pathways, distinguishes between short-term market fluctuations and long-term value chain restructuring, and objectively identifies structural weaknesses that amplify risk diffusion. Findings indicate that the outflow of mature packaging capacity simultaneously compresses the operating space of upstream and downstream suppliers, reduces investment in advanced process R&D, and amplifies external policy shocks due to multinational corporations diversified global footprint. To address real-world challenges such as imbalanced domestic industrial distribution, insufficient technological self-reliance, and overly centralized overseas expansion models, optimizing tiered domestic capacity allocation, advancing full-chain breakthroughs in advanced packaging technologies, and diversifying offshore low-value-added processes can effectively buffer the disruption caused by capacity relocation, thereby strengthening the semiconductor supply chain’s autonomy, resilience, and recovery capability.
VL - 14
IS - 5
ER -
Tianyao, S. (2026). Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Science Innovation, 14(5), 175-184. https://doi.org/10.11648/j.si.20261405.14
Tianyao, S. Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Sci. Innov.2026, 14(5), 175-184. doi: 10.11648/j.si.20261405.14
Tianyao S. Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies. Sci Innov. 2026;14(5):175-184. doi: 10.11648/j.si.20261405.14
@article{10.11648/j.si.20261405.14,
author = {Shi Tianyao},
title = {Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies},
journal = {Science Innovation},
volume = {14},
number = {5},
pages = {175-184},
doi = {10.11648/j.si.20261405.14},
url = {https://doi.org/10.11648/j.si.20261405.14},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.si.20261405.14},
abstract = {Geopolitical competition and national industrial policies are continuously reshaping the global semiconductor division of labor. Leveraging its comprehensive industrial advantages, Malaysia has steadily absorbed mature packaging capacity from China, gradually triggering supply instability in the domestic back-end manufacturing sector. Although China ranks among the world leaders in packaging and testing (P&O) industry scale, its production capacity remains geographically concentrated, and there are notable gaps in high-end supporting capabilities. The outflow of mature packaging operations directly undermines the foundation for local technological advancement. Existing research has not fully mapped the transmission process of this targeted capacity shift or provided regionally tailored risk management strategies aligned with China’s industrial disparities. Based on China’s current P&O industry layout, technological development status, and Malaysia’s industrial absorption characteristics, this study analyzes the internal logic through which capacity relocation impacts supply chain resilience, dissects multi-layered risk transmission pathways, distinguishes between short-term market fluctuations and long-term value chain restructuring, and objectively identifies structural weaknesses that amplify risk diffusion. Findings indicate that the outflow of mature packaging capacity simultaneously compresses the operating space of upstream and downstream suppliers, reduces investment in advanced process R&D, and amplifies external policy shocks due to multinational corporations diversified global footprint. To address real-world challenges such as imbalanced domestic industrial distribution, insufficient technological self-reliance, and overly centralized overseas expansion models, optimizing tiered domestic capacity allocation, advancing full-chain breakthroughs in advanced packaging technologies, and diversifying offshore low-value-added processes can effectively buffer the disruption caused by capacity relocation, thereby strengthening the semiconductor supply chain’s autonomy, resilience, and recovery capability.},
year = {2026}
}
TY - JOUR
T1 - Malaysia's Shift in Packaging and Testing: Impact on China's Semiconductor Supply Chain Disruption and Response Strategies
AU - Shi Tianyao
Y1 - 2026/09/04
PY - 2026
N1 - https://doi.org/10.11648/j.si.20261405.14
DO - 10.11648/j.si.20261405.14
T2 - Science Innovation
JF - Science Innovation
JO - Science Innovation
SP - 175
EP - 184
PB - Science Publishing Group
SN - 2328-787X
UR - https://doi.org/10.11648/j.si.20261405.14
AB - Geopolitical competition and national industrial policies are continuously reshaping the global semiconductor division of labor. Leveraging its comprehensive industrial advantages, Malaysia has steadily absorbed mature packaging capacity from China, gradually triggering supply instability in the domestic back-end manufacturing sector. Although China ranks among the world leaders in packaging and testing (P&O) industry scale, its production capacity remains geographically concentrated, and there are notable gaps in high-end supporting capabilities. The outflow of mature packaging operations directly undermines the foundation for local technological advancement. Existing research has not fully mapped the transmission process of this targeted capacity shift or provided regionally tailored risk management strategies aligned with China’s industrial disparities. Based on China’s current P&O industry layout, technological development status, and Malaysia’s industrial absorption characteristics, this study analyzes the internal logic through which capacity relocation impacts supply chain resilience, dissects multi-layered risk transmission pathways, distinguishes between short-term market fluctuations and long-term value chain restructuring, and objectively identifies structural weaknesses that amplify risk diffusion. Findings indicate that the outflow of mature packaging capacity simultaneously compresses the operating space of upstream and downstream suppliers, reduces investment in advanced process R&D, and amplifies external policy shocks due to multinational corporations diversified global footprint. To address real-world challenges such as imbalanced domestic industrial distribution, insufficient technological self-reliance, and overly centralized overseas expansion models, optimizing tiered domestic capacity allocation, advancing full-chain breakthroughs in advanced packaging technologies, and diversifying offshore low-value-added processes can effectively buffer the disruption caused by capacity relocation, thereby strengthening the semiconductor supply chain’s autonomy, resilience, and recovery capability.
VL - 14
IS - 5
ER -
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