A Glimpse into Malaysia’s Semiconductor Aspirations: Bridging Partnerships, Bridging Technologies

The semiconductor industry has emerged as one of the most important sectors powering today’s digital world. It underpins innovations across various fields from automotive and healthcare to artificial intelligence and 5G connectivity. Recognising chip manufacturing’s vital role, Malaysia has unveiled a bold National Semiconductor Strategy (NSS) to strengthen its position internationally and advance its domestic industry ecosystem.

The comprehensive long-term NSS aims to cement Malaysia’s status as a global player in this strategic field. It presents a phased roadmap over the next decade focusing on advancing the entire value chain from integrated circuit (IC) design to manufacturing and equipment. The far-reaching initiative demonstrates the country’s firm commitment to propelling an entire high-tech industry and workforce to greater heights.

Malaysia has a solid semiconductor foothold spanning five decades of foreign investment and partnership. Major brands like Intel, AMD and Bosch established early operations, joined later by Infineon, Micron and many others. Malaysia has successfully developed homegrown champions such as Inari, Vitrox, Oppstar, SkyeChip and Pentamaster as part of the global value chain. Over the years, this fostered a robust local supply chain and skilled talent pool. Today, the sector represents the 6th largest exporter worldwide and 10th for electronics overall.

However, there remains room to ascend higher in value. The first phase of the NSS therefore aims to leverage existing capacity. Priority areas include modernising outsourced semiconductor assembly and test (OSAT) with moves towards advanced packaging and growing current chip fabrication, particularly in power semiconductors critical for technologies like electric vehicles. Local chip design companies will also be nurtured under government support programmes.

Upon completion of Phase 1, attention will shift to more advanced domains in the second stage. Plans are in place to pursue leading-edge logic and memory chips design as well as fabrication and testing activities. With a strengthened value proposition, the country hopes to attract top-tier manufacturers to set up onshore facilities. Local design champions will be well-poised to plug into their networks as key partners and suppliers.

The final phase doubles down on positioning Malaysia as a global innovation leader. This involves fostering world-class homegrown players in next-gen fields such as advanced packaging, manufacturing equipment and more. Concurrently, efforts will focus on partnering with prestigious brands at the forefront of chip technology as anchors for sophisticated fabrication operations within Malaysian shores.

To translate vision into reality, the strategy unveils aggressive quantified goals. These include attracting at least RM500 billion in total investments, cultivating 10 large local semiconductor corporations and 100 related SMEs. Training over 60,000 engineers is also on the cards to sustain industry human capital needs.

In terms of monetary allocation, RM25 billion is earmarked for incentive programmes over the coming years. Continuous engagement by a high-level task force will ensure coordinated progress across stakeholders. World-class local research consortia will support technology development work in tandem.

As a geopolitically neutral location, Malaysia welcomes both foreign and local partners to join in building Asia’s most advanced chipmaking ecosystem. International firms seeking new opportunities amid regional technology decoupling trends stand to leverage the nation’s strategic location and business-friendly policies. Multinational corporations can tap local talent and tap into innovative solutions from within.

MIDA serves as the leading agency facilitating new investment and fostering synergy across industry and academia. Interested companies are encouraged to contact its representative offices worldwide to explore viable collaboration proposals. With enabling infrastructure and a culture of open collaboration, Malaysia presents an attractive value proposition to take technology cooperation to new heights.

In summarising Malaysia’s aspirations, the Prime Minister, YAB Dato’ Seri Anwar Ibrahim stated “Whether you are an investor, manufacturer, engineer or policymaker, you are welcome to join us in this transformative journey towards a more inclusive, resilient and impactful semiconductor future for Malaysia and the world.” This inclusive spirit encapsulates the country’s drive to power shared prosperity through strategic partnerships under its National Semiconductor Strategy.