Malaysia targets RM500 billion chip industry investment

Malaysia aims to attract RM500 billion ($106.281 billion) in investments under the the first phase of the National Semiconductor Strategy (NSS), The Malay Mail reported on Monday citing Prime Minister Datuk Seri Anwar Ibrahim.

The NSS will focus on two key investment streams:

Domestic Direct Investments (DDI): These investments will focus on integrated circuit design, advanced packaging, and manufacturing equipment to create higher-wage opportunities for Malaysia’s workforce.

Foreign Direct Investments (FDI): Foreign investors will target water fabrication and manufacturing equipment to establish Malaysia as a global hub for semiconductor R&D.

The NSS is structured into three phases:

Phase one focuses on modernising semiconductor assembly and test capacity, expanding fabs in Malaysia, and attracting foreign investment for power chip production.

Phase two aims to advance to cutting-edge chip design, fabrication, and testing, integrating chip purchasers and attracting leading manufacturers.

Anwar said that during this phase “we want to establish at least 10 Malaysian companies in design advanced packaging with revenues between RM1 billion to RM4.7 billion, and at least 100 semiconductor-related companies with revenues close to RM1 billion, creating higher wages for Malaysian workers.”

Phase three supports Malaysian semiconductor design firms, attracts buyers like Apple and Huawei, and promotes advanced manufacturing in Malaysia.

Simultaneously, this phase is targeting buyers from cutting-edge companies like Apple, Huawei, and Lenovo to invest in advanced manufacturing within Malaysia

Anwar emphasised that a robust multinational semiconductor production sector is crucial for humanity’s survival, especially given the urgency of climate action and risk mitigation.