Malaysia is setting its sights on a whopping 500 billion ringgit ($107 billion) investment to elevate its semiconductor industry, Prime Minister Anwar Ibrahim announced on Tuesday. The Southeast Asian nation aims to solidify its position as a global manufacturing powerhouse.
Already a significant player, Malaysia contributes 13 percent to the global semiconductor testing and packaging market. The country has successfully attracted multibillion-dollar investments from industry giants like Intel and Infineon in recent years.
Prime Minister Anwar outlined that the targeted investment will focus on integrated circuit design, advanced packaging, and manufacturing equipment for semiconductor chips. Additionally, Malaysia plans to establish at least 10 local companies specializing in design and advanced packaging, each projected to generate revenues between $210 million and $1 billion.
To achieve these ambitious goals, Malaysia will allocate $5.3 billion in fiscal support, with further details expected to be revealed soon. \"We have a strong capacity to diversify and move higher in the value chain … to move towards even more high-end manufacturing, semiconductor design and advanced packaging,\" Anwar stated during an industry event.
Looking ahead, Malaysia intends to build Southeast Asia's largest integrated circuit design park. The government plans to offer incentives such as tax breaks, subsidies, and visa exemptions to attract global tech companies and investors. This move is part of Malaysia's strategy to transition from backend chip assembly and testing to high-value, front-end design work.
The country is well-positioned to capture additional business in the semiconductor sector as Chinese chip firms seek to diversify their assembly operations outside of China. Notable collaborations include China's Xfusion partnering with Malaysia's NationGate to manufacture GPU servers for AI and high-performance computing, and Shanghai-based StarFive establishing a design center in Penang.
Global investors are taking notice. Germany's Infineon announced an investment of 5 billion euros ($5.4 billion) to expand its power chip plant in Malaysia last August, while Intel committed to building a $7 billion advanced chip packaging plant in the country back in 2021.
Reference(s):
Malaysia eyes over $100 billion in semiconductor industry investment
cgtn.com
