Malaysia’s New Strategy Targets USD 106 Billion Investment to Boost Semiconductor Industry

June 2024

Malaysia is committed to solidifying its position as a global technology powerhouse, leveraging its strong semiconductor industry. The National Semiconductor Strategy (NSS) outlines a significant expansion for this sector, with the country targeting investments of at least MYR 500 billion (USD 106 billion) during the first phase of the initiative.

NSS is structured in three phases to foster collaboration with companies across ASEAN, Asia, and the global market. In the first phase, domestic direct investment (DDI) will focus on integrated circuit (IC) design, advanced packaging and manufacturing equipment, while foreign direct investment (FDI) be focused on wafer fabs and manufacturing equipment. In this phase, Malaysia will leverage the industry’s existing capacity and capabilities to support the modernization of outsourced semiconductor assembly and test (OSAT) with moves towards advanced packaging; grow existing fabs in Malaysia and pursue FDI on expanding capacity in trailing edge chips, particularly power chips; as well as develop local chip design champions.

Under NSS’ second phase, the nation is keen to establish at least 10 Malaysian companies in design and advanced packaging with revenues of between MYR 1 billion (USD 210 million) and MYR 4.7 billion (USD 1 billion). In addition, it also hoped to nurture at least 100 semiconductor-related companies with revenues close to MYR 1 billion (USD 210 million), creating higher wages for Malaysian workers. Malaysia is recognized as the world’s sixth-largest semiconductor exporter, commanding 13% of the global market for semiconductor packaging, assembly, and testing, and supplying 20% of the US’ annual semiconductor imports.

(Sources: The Star; Malay Mail)

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