Malaysia Targets $107 Billion Investment to Become Global Semiconductor Hub
Malaysia is setting its sights on a massive 500 billion ringgit ($107 billion) investment in its semiconductor industry, Prime Minister Anwar Ibrahim announced on Tuesday. This ambitious move positions the Southeast Asian nation to become a key global manufacturing hub in the rapidly evolving semiconductor sector.
Shifting Up the Value Chain
“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,” Anwar declared during an industry event.
Currently accounting for 13% of global semiconductor testing and packaging, Malaysia has long been a significant player in the industry. The country has attracted substantial investments from leading firms such as Intel and Infineon in recent years. Now, it aims to further elevate its status by focusing on integrated circuit design, advanced packaging, and manufacturing equipment for semiconductor chips.
To achieve this goal, Malaysia plans to establish at least 10 local companies specializing in design and advanced packaging, each with revenues ranging from $210 million to $1 billion. The government is allocating $5.3 billion in fiscal support to meet these ambitious targets, with further details to be announced soon.
Attracting Global Tech Giants
In an effort to draw global technology companies and investors, Malaysia is offering incentives including tax breaks, subsidies, and visa exemption fees. Plans are underway to build Southeast Asia’s largest integrated circuit design park, signaling Malaysia’s commitment to move beyond backend chip assembly and testing into high-value, front-end design work.
Strategic Partnerships and Investments
Malaysia’s strategic location and robust semiconductor ecosystem make it an attractive destination for international partnerships. Chinese chip firms, diversifying outside of China for assembly needs, view Malaysia as well-positioned to capture further business in the sector.
Notable collaborations include China’s Xfusion, a former Huawei unit, partnering with Malaysia’s NationGate to manufacture GPU servers for data centers and high-performance computing. Additionally, Shanghai-based StarFive is constructing a design center in Penang, and TongFu Microelectronics is expanding its Malaysian facility—a venture with U.S. chipmaker AMD.
European and American semiconductor giants are also investing heavily. Germany’s Infineon announced a €5 billion ($5.4 billion) expansion of its power chip plant last August, and U.S. chipmaker Intel is building a $7 billion advanced chip packaging plant, demonstrating strong confidence in Malaysia’s future in the industry.
Looking Ahead
While Prime Minister Anwar did not specify a timeline for achieving these targets, the nation’s aggressive investment strategy and partnerships indicate a significant shift in the global semiconductor landscape. Malaysia’s commitment to advancing up the value chain could bolster its economy and cement its role as a central player in the global technology arena.
Reference(s):
Malaysia eyes over $100 billion in semiconductor industry investment
cgtn.com
