$100 Billion Target for Malaysia’s Semiconductor Industry

Malaysia Targeting $100 Billion in Semiconductor Industry Investment

Malaysia has set a target of acquiring investments worth at least $107 billion (RM 500 billion) for its semiconductor industry as part of its ongoing strategy to position itself as a leading global manufacturing hub.

Malaysia’s semiconductor industry currently contributes 13% of the global testing and packaging activities. In recent years, the country has had great success attracting substantial investments from industry giants, including Infineon and Intel.

 

Setting Goals and Targets For the Future

Malaysia’s semiconductor industry aims to focus its projected investments on areas like advanced packaging, integrated circuit design, and the manufacturing of semiconductor chips. Malaysia also aims to form at least 10 local companies in the sector. These companies would focus on advanced packaging and chip design and are expected to generate anywhere from $210 million to $1 billion in revenue.

$5.3 billion in fiscal assistance will be allocated toward these goals. Subsidies, tax breaks, and visa exemption fees will also be offered to attract investors. The plan is to create the largest integrated circuit design park in Southeast Asia. No specific timeline has been given for these goals as yet. Malaysia has set its sights on transitioning from backend chip testing and assembly to high-value, front-end design work.

 

Positioned for Success

Big players like China seek alternatives outside the country for their assembly needs. In this way, Malaysia’s semiconductor industry is well-positioned to serve those needs. In September 2023, China’s Xfusion partnered with Malaysia’s NationGate to create GPU servers designed for data centres. Shanghai’s FiveStar set up a base in Penang while TongFu Microelectronics (in partnership with AMD, the US chipmaker) expanded to Malaysia.

Germany’s Infineon also plans to invest $5.4 billion (5 billion euros) to expand its power chip plant in Malaysia. US-based Intel has also announced its intention to build a $7 billion advanced chip packaging plant in Malaysia.

 

Looking to Start a Business in Malaysia?

Malaysia’s overarching goal in the semiconductor industry is a huge boost for anyone looking to start a business in Malaysia, especially in the hardware and tech sectors. If you’re an entrepreneur, you can contact 3E Accounting for company incorporation services. We’ll incorporate your company, while you focus on growing it.