Malaysia Targets Ambitious $107B Investment to Boost Semiconductor Sector

Malaysia aims to attract at least 500 billion ringgit ($107 billion) in investments for its semiconductor sector, Prime Minister Anwar Ibrahim has reportedly said.

The planned investments are targeted at integrated circuit design, advanced packaging, and semiconductor chip manufacturing equipment, reported Reuters.

Malaysia plays an important role in the semiconductor market, contributing to 13% of global testing and packaging. Major firms, including Intel Corp INTC and Infineon Technologies AG IFNNY, have made substantial investments in the country in recent years.

Prime Minister Anwar also highlighted the goal of establishing at least ten local companies specializing in chip design and packaging, with projected revenues between $210 million and $1 billion.

The Malaysian government will allocate $5.3 billion in fiscal support to achieve the objectives, with further details to be provided in the future.

Anwar emphasized Malaysia’s capability to advance in the value chain, enhancing high-end manufacturing and semiconductor design.

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On April 22, Anwar announced Malaysia’s plan to build Southeast Asia’s largest integrated circuit design park. The government will offer incentives such as tax breaks, subsidies, and visa exemption fees to attract global tech companies and investors.

The initiative aims to move beyond backend chip assembly and testing to high-value, front-end design work.

Malaysia is poised to benefit from Chinese chip companies seeking diversification outside of China for their assembly needs.

For instance, last September, China’s Xfusion partnered with Malaysia’s NationGate to produce GPU servers, crucial for data centers and AI applications.

Additionally, Shanghai-based StarFive is establishing a design center in Penang, while TongFu Microelectronics Co Ltd is expanding its Malaysian facility in collaboration with Advanced Micro Devices Inc AMD.

Germany’s Infineon announced a €5 billion investment last August to expand its power chip plant in Malaysia.

Similarly, Intel INTC revealed plans in 2021 to construct a $7 billion advanced chip packaging facility in Malaysia, reinforcing the country’s position in the semiconductor industry.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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