Malaysia plots US$5.3 billion roadmap to build advanced chip ecosystem

Joanna Gao, Taipei; Jingyue Hsiao, DIGITIMES Asia 0


Malaysian Prime Minister Anwar Ibrahim announced the National Semiconductor Strategy (NSS), with the government allocating MYR25 billion (US$5.3 billion) to foster industry development.

According to reports from Bernama and The Edge Malaysia, the National Semiconductor Strategy will be implemented in three phases: expanding on the established foundation, building an advanced chip supply chain, and attracting top international customers.

In the first phase, Malaysia aims to bolster the semiconductor industry by modernizing outsourced semiconductor assembly and test (OSAT) facilities, expanding fabrication plants, and cultivating local IC design champions. The government will incentivize local companies to invest in IC design, particularly mature node chips like PMICs, advanced packaging, and chipmaking equipment while actively attracting foreign investments in wafer fabs and chipmaking equipment to further enhance the country's semiconductor capabilities.

In the second phase, Malaysia will focus on advancing chip design, fabrication, and testing, integrating local champions into the ecosystem of cutting-edge fabrication companies. This approach aims to elevate Malaysia's position in the global semiconductor industry by nurturing homegrown talent and expertise while fostering collaboration with leading international firms.

In this phase, the Malaysian government will support at least ten companies in the IC design and advanced packaging sectors to help them achieve an annual revenue of MYR 1-4.7 billion (US$210 million to US$1 billion). In addition, Malaysia plans to incubate 100 chip firms, nurturing them to reach an expected revenue of MYR 1 billion each and strengthening the nation's semiconductor industry.

The final phase aims to develop world-class Malaysian firms in IC design, advanced packaging, and manufacturing equipment. In addition, it seeks to attract major international firms, such as Apple and Huawei, to place orders with Malaysian firms.

In April, Anwar hinted at the upcoming launch of a semiconductor plan. After over a month, the National Semiconductor Strategy was officially announced at the SEMICON Southeast Asia 2024. The Ministry of Investment, Trade, and Industry of Malaysia will oversee the implementation of this strategy.

The Malaysian government has repeatedly stated that the country's semiconductor industry will advance towards IC design, enhancing its value in the industry chain. In addition, the largest IC design park in Southeast Asia has been established in Selangor and is expected to be operational in July 2024.

Meanwhile, Anwar emphasized Malaysia's neutrality and non-alignment in international politics and economics, hoping that amidst geopolitical conflicts, Malaysia can become the preferred choice for global companies to invest.