Malaysia Aims For $107 Billion Investment in Semiconductor Industry

Malaysian Prime Minister Anwar Ibrahim has announced an ambitious plan to attract investments worth USD 107 billion for the semiconductor industry. To achieve this target, the Malaysian government will allocate around USD 5.3 billion for semiconductor projects in Malaysia.

PM Anwar Ibrahim also highlighted that they would establish at least 10 local companies in the design and advanced packaging for semiconductor chips, with revenues ranging from USD 210 million to USD 1 billion. "We have a strong capacity to diversify and move higher in the value chain towards even more high-end manufacturing, semiconductor design and advanced packaging," Prime Minister Anwar Ibrahim said.

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The investment being sought would be for integrated circuit design, advanced packaging, and manufacturing equipment for semiconductor chips. Recently, Malaysia announced its plans to develop Southeast Asia’s largest semiconductor design park.

Background

Malaysia has long been a significant player in the semiconductor industry, particularly known for contributing 13% to the global testing and packaging market. The country has successfully drawn multibillion-dollar investments from tech giants such as Intel and Infineon, underscoring its potential and strategic importance in the semiconductor supply chain.

The National Semiconductor Strategy: Malaysia

The first phase of the National Semiconductor Strategy focuses on domestic direct investment (DDI) in integrated circuit (IC) design, advanced packaging, and manufacturing equipment, while foreign direct investment (FDI) will target wafer fabs and manufacturing equipment. 

The strategy is to leverage Malaysia's industry capacity and capabilities to modernize outsourced semiconductor assembly and testing (OSAT) services, expand existing factories, and develop local chip design champions. The second phase aims to establish at least 10 Malaysian companies in design and advanced packaging with revenues between USD 210 million and USD 1 billion.

Additionally, the strategy aims to nurture at least 100 semiconductor-related companies with revenues close to USD 210 million, resulting in higher wages for Malaysian workers. The NSS also envisions Malaysia becoming a global semiconductor research and development (R&D) hub, fostering innovation, enhancing R&D capabilities, and driving the commercialization of semiconductor technologies.

Apart from this, significant investments from global firms like Intel and Infineon and Nvidia's collaboration to develop an artificial intelligence cloud and supercomputer center underscore the confidence in Malaysia's semiconductor market. These investments contribute to the industry's growth and solidify Malaysia's role as a crucial link in the global semiconductor market.

Read: China Unveils a Massive Support Package of $47 Billion For Semiconductor Industry

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