The electrical and electronics industry is Malaysia's leading industrial sector, contributing significantly to the country's manufacturing output, exports and employment. In 2007, gross output of the industry totaled RM197.1 billion (US$61.6 billion), while the industry exports of electrical and electronics products amounted to RM266.3 billion (US$83.2 billion) or 58.9 per cent of Malaysia manufactured exports and 44 per cent of Malaysia total exports.

Today, Malaysia's electronics industry has developed significant capacities and skills in the manufacture of a wide range of semiconductor devices, high-end consumer electronic goods and information and communication technology (ICT) products. The electrical and electronics manufacturers in the country continuously moved up the value chain to produce higher value-added products to remain competitive. These include intensification of research and development efforts and in-sourcing activities for their related companies worldwide.

This sub-sector includes the manufacture of colour television receivers, audio visual products such as CD/VCD/DVD players, home theaters, portable digital music palyers, camcorders and digital cameras. The industry is moving towards the utilisation of flat panel display technology and production of multifunction digital audio/video products. The capital investment in this sub-sector for the period 2000 till 2007 amounted to RM5.3 billion (US$1.71).

The products under this sub-sector include semiconductor devices (fabricated wafers, ICs and IC design), passive components (capacitors, inductors, resistors) and other components (such as storage media, disk drive parts, PCBs and metal and plastic parts/components for electrical and electronic (E&E) application). Capital investment for the year 2007 amounted to RM10.7 billion (US$3.45 billion). Within this sub-sector, the semiconductor industry is dominant in terms of production, employment creation and export contribution. Major semiconductor devices produced are linear and digital integrated circuits, memories and microprocessors, opto-electronics, discrete devices, hybrids and arrays.

According to UNCTAD Handbook of statistics 2006-2007, Malaysia was among the five largest exporters of semiconductor devices in the world. Exports of semiconductor devices in 2007 were valued at RM96.5 billion (US$31.13 billion) or 39.4% of total electronics export.

The products overs ICT products such as computer and computer peripherals, telecommunications, optics; and other industrial electronic products such as office equipment (copier machines, fax machines, typewriters, automatic data processing machines) and industrial controllers.Companies in this sub-sector have moved into production and development of higher-end industrial electronic products such as computer networking equipment, new generation audio-visual digital equipment and data storage devices (MR magnetic heads, compact discs (CD) media and hard disc drives).The capital investment under this sub-sector amounted to RM0.8 billion (US$0.2 billion) for the year 2007.

Electrical products are categorised into three sub-sectors, namely industrial equipment, electrical components and household appliances.There are presently more than 238 companies producing a wide range of products such as household electrical appliances, wire and cables and electrical industrial equipment.Manufacturing activities in the electrical industry have evolved from mere assembly to design and development of components and high end products of foreign brands including R&D, design and marketing of local brands for the regional and global markets.In 2007, Malaysia exported electrical products valued at RM21.5 billion (US$6.7 billion).The capital investment?n this sub-sector amounted to RM1.7 billion (US$0.5 billion) for the year 2007.