The Southeast Asian country has been working to foster the semiconductor industry, positioning itself as a neutral hub for manufacturers, as global companies diversify their supply chains amid the growing U.S.-China rivalry and other geopolitical tensions.
Under the National Semiconductor Strategy announced Tuesday, the government will allocate at least 25 billion ringgit ($5.33 billion) over the next five to 10 years to foster talent and grow local companies, with funds supplied by Malaysian sovereign wealth funds such as Khazanah Nasional.
"Our vision is to create an ecosystem driven by dynamic Malaysian firms and world-class talent -- while partnering with global companies -- to compete regionally and globally based on innovation and creativity," Anwar said Tuesday, announcing the strategy at the Semicon Southeast Asia 2024 trade show in Kuala Lumpur. "Today, I offer our nation as the most neutral and non-aligned location for semiconductor production to help build a more secure and resilient global semiconductor supply chain."
The strategy aims to train 60,000 people in various aspects of chipmaking, from design, to packaging, to testing. The training program will involve universities and corporations.
Having more skilled local engineers is critical if Malaysia is to attract greater investment from global chipmakers, especially as the government hopes to have more advanced chip manufacturing in the country.
According to the strategy, the government aims to draw 500 billion ringgit of investment through domestic direct investment (DDI) and foreign direct investment (FDI). It will also support local engineers in creating intellectual property in the form of chip designs.
Malaysia's foray into the semiconductor industry began more than five decades ago. The country supplies about 13% of chip packaging, assembly and testing services worldwide, according to the Malaysian Investment Development Authority.
In December 2021, Intel spent more than $7 billion to build a chip packaging and testing plant, with production expected to begin this year. Last year, Germany's Infineon Technologies announced an investment of up to 5 billion euros over the next five years to build the world's largest 200-millimeter silicon carbide power fabrication facility.
Malaysia has recently been working to foster high-tech manufacturing, including semiconductors. Most recently, the government rolled out the "Golden Pass" and other incentive packages last month to lure the world's leading venture capital firms and tech startups to the country. It also announced the establishment of the region's largest integrated chip design hub in the industrial state of Selangor, near the capital.
Additional reporting by Hakimie Amrie.