Analysts said Malaysian government’s effort to reestablish the country’s positioning in the semiconductor global supply chain has started to yield results.

According to MBSB Research, a year after the announcement of the National Semiconductor Strategy (NSS), a notable strategic investment of MYR 63 billion ($14.88 billion) has been secured, along with over 13,000 talent being groom as well as wider research and development (R&D) footprint.

It is noted that in 2023, the ASEAN semiconductor market stood at over $31 billion.

By 2032, the ASEAN semiconductor market has the potential to exceed $52 billion by moving up the value chain.

To further drive growth in the Malaysia as well as the broader ASEAN semiconductor landscape, the Malaysian government put forth three new measures in the areas of capital, government to government (G2G) collaboration and talent.

“While we acknowledge the milestone and commitment to the target set, we view that we are still at an early stage of the progress. Thus, more time is required to climb up the semiconductor value chain,” said MBSB.

It is also noted that the NSS was announced in May 2024 to redefine the country’s position in the global semiconductor supply chain.

It focuses on integrated circuit (IC) design, advanced packaging and advanced manufacturing equipment.

In addition, it also seeks to train 60k high-skilled engineers and establish a global R&D hub for semiconductors.

As of March 2025, Malaysia has secured over MYR 63 billion ($14.88 billion) in semiconductor investments.

Of this, MYR 59 billion ($13.93 billion) originated from foreign investors while the remainder MYR 5 billion ($1.18 billion) came from domestic sources.

Some of the notable projects include Carsem’s advanced packaging for energy efficiency, electric vehicle (EV）, connectivity and artificial intelligence (AI); NXP’s semiconductor products, Infineon’s world’s largest 200mm silicon carbide (SiC) power fab, Syntiant’s MEMS microphone and sensors; and Plexus’ manufacture and re-manufacture of Printed Circuit Boards.

Meanwhile, more than 13k highly skilled workers have been trained through national programs such as CREST’s ETSI and TalentCorp’s MyMahir initiative.

The R&D footprint is also growing, supported by including Penang’s Silicon Design@5km+, Selangor’s IC Design Park and Sarawak’s SMD Semiconductor initiative.

To further enhance NSS, the Malaysian government aims to unlock more catalytic capital to support early-stage R&D, product development, and ecosystem scaling.

This includes a suite of targeted financing instruments, matching funds, and customized incentives, alongside continued investments by the government-linked investment companies (GLICs).

The government is also seeking deeper G2G cooperation. This will be carried out via the creation of ASEAN Framework for Integrated Semiconductor Supply Chain (AFISS).

The framework will revolve around policy alignment, infrastructure readiness and deeper cross-border collaboration.

To further close the gap on talent shortage, the government will also drive stronger collaboration across public, private, and academic institutions.

This also extends to intensifying R&D efforts through strategic collaboration between government, industry, and academia.

Meanwhile, CIMB Securities said in its recent report that Malaysia’s transition from a back-end assembly base to a design-to-packaging semiconductor hub remains a work in progress.

“However, we are encouraged to see that the NSS is gaining investor traction, institutional support, and regional momentum,” said the research house.

With MYR 63 billion ($14.88 billion) in committed investments, an increase in local champions, and stronger
ASEAN alignment, it opined that Malaysia is positioning itself as a neutral, indispensable node in the global chip supply chain.

“We see this as one of the key advantages in ensuring Malaysia remains an attractive destination for semiconductor manufacturing globally,” it added.

It also highlighted that the investments secured by NSS underscored rising investor confidence in Malaysia’s semiconductor ecosystem.

According to the research house, Malaysia also aims to develop ten local semiconductor firms with revenues exceeding $1 billion and 100 firms with revenues exceeding MYR 1 billion.

The government has identified 13 Malaysian-based companies across the semiconductor value chain as key beneficiaries, including Carsem (MPI), Inari Amertron, Pentamaster, ViTrox, and Kellington.

In addition, promising IC design and services firms like Oppstar, SkyeChip, Infinecs, and Experior are also being nurtured to spearhead Malaysia’s next phase of semiconductor growth.

More than MYR 2 billion ($470 million) has been committed by government-linked investment companies (GLICs) (e.g., Khazanah, Retirement Fund Inc [KWAP]) and development banks via the GEAR-uP initiative.

This complements a planned MYR 25 billion ($5.9 billion) in total fiscal support under the NSS to accelerate R&D, ecosystem development, and global partnerships.

As ASEAN Chair in 2025, Malaysia is spearheading the ASEAN Integrated Semiconductor Supply Chain Framework to harmonize talent flows, fiscal incentives, and infrastructure across member states.

A memorandum of understanding signed by the semiconductor associations of Malaysia, Singapore, Vietnam, Thailand, and the Philippines aims to create a unified regional chip ecosystem.

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