The Ferrari engineers were unable to fix the problem before the session ended, meaning Vettel will be last on the grid in Sunday's race. Hamilton was then unable to improve on his second run, and while Raikkonen did, it wasn't quite enough, with the Finn finishing 0.045secs slower.
Raikkonen turns 38 later this month, but the 2007 Formula One champion has been showing admirable form recently. "But the race is tomorrow".
"I looked at a lot of things and there's definitely a lot of things I could do better if I could do the race again", he continued.
Ahead of the race, Press Association Sport looks at the major talking points as the season rolls on.
"I'm all right, I didn't see anything", said Grosjean.
I didn't do anything today, this afternoon especially so it's not something to feel that much about.
"I'm not too fussed about the amount of points". After finishing 2nd in 2016 at Sepang, it is Verstappen's turn to spray the champagne from the top of the podium.
While Ferrari's Sebastian Vettel, who was leading the charts early in the practice, suffered a huge setback when his car's engine failed and he failed to register time for tomorrow's qualifying.
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Vettel did get out in the first qualifying session after the Ferrari mechanics changed his engine, but the German immediately radioed to say he was down on power. We had some big calls to make going into qualifying and then those laps were, particularly the last one, the first Q3 lap, was very well put together, a very nice lap.
Qualifying for the Malaysian Grand Prix starts at 7pm on Saturday night.
Finnish driver Kimi Raikkonen of Ferrari was the fastest in Saturday's third free practice after covering the Sepang Circuit in one minute and 31.880 seconds, ahead of Vettel, who won the second practice on Friday.
Vettel did not incur any penalty for the engine change because it was the fourth one of the season - the maximum.
"The last race was a strong reminder that sport always has the power to surprise and defy all predictions", said Mercedes team boss Toto Wolff after the two Ferraris collided at Singapore. "If the safety vehicle comes out in a moment that suits you, it could bring you back into the game".
Vettel saw his hopes of a fifth F1 world title take a hit when he tangled with Verstappen and Raikkonen on the run to the first corner at Marina Bay two weeks ago, with all three drivers retiring as a result of damage sustained. Mercedes' Lewis Hamilton waves after getting pole position in qualifying.
The Briton won't need to win another race this season if Vettel, a record four-time victor in Malaysia, finishes lower than second on Sunday. We saved some tyres, so there are some positives even though it is a really bad day.