Malaysia is searching for to draw at the least 500 billion ringgit ($107 billion) in funding for its semiconductor trade, Prime Minister Anwar Ibrahim stated yesterday, as he launched the nation’s Nationwide Semiconductor Technique.
Talking on the Semicon Southeast Asia 2024 commerce present in Kuala Lumpur, the Malaysian chief stated that his authorities supposed to “create an ecosystem pushed by dynamic Malaysian companies and world-class expertise,” Nikkei Asia reported.
“In the present day, I provide our nation as essentially the most impartial and non-aligned location for semiconductor manufacturing to assist construct a safer and resilient world semiconductor provide chain,” he stated.
To assist its targets, the federal government will provide fiscal assist of at the least 25 billion ringgits ($5.3 billion), to supply incentives to international buyers and practice 60,000 Malaysian engineers to fulfill trade demand.
The Nationwide Semiconductor Technique is an try to consolidate Malaysia’s standing as a significant participant within the semiconductor trade, which is predicated across the sprawling industrial parks of Penang and Kulim. In recent times, the nation has attracted multibillion-dollar investments from main worldwide companies. These embrace the U.S. chipmaker Intel, which introduced in 2021 it will construct a $7 billion 3D chip packaging plant within the nation, and the German agency Infineon, which stated final 12 months that it will invest 5 billion euros ($5.4 billion) to broaden its current plant in Malaysia, which creates chips for electrical autos. The Western companies AT&S, Nvidia, Texas Instruments, Ericsson, and Bosch are all increasing their operations in Malaysia, as are the Chinese companies Xfusion, StarFive, and TongFu Microelectronics.
Malaysia now accounts for 13 percent of world semiconductor testing and packaging, and is already the world’s sixth largest exporter of semiconductors, in line with a report within the New York Instances. Nonetheless, most of this focuses on the lower end of the value chain, comparable to meeting and testing. The present initiative is a transparent try to maneuver upward into extra advanced and technologically refined processes. Anwar said yesterday that Malaysia needs to ascertain at the least 10 native corporations in design and superior packaging for semiconductor chips, and “transfer to the frontier.”
“We’ve a robust capability to diversify and transfer larger within the worth chain… to maneuver in the direction of much more high-end manufacturing, semiconductor design, and superior packaging,” he stated, in line with Reuters.
Anwar’s announcement displays the rising competitors amongst Southeast Asian governments to draw Western buyers, as many start to diversify their operations away from China. (Anwar’s description of Malaysia as a “impartial and non-aligned location” made this aim express.)
On this race, Malaysia enjoys an enviable head begin as a longtime regional leader in electrical and electronics (E&E) manufacturing, together with in semiconductors, which dates again to the early Seventies.
On the time, the federal government set up a free-trade zone on the island of Penang, constructing industrial parks and different infrastructure, whereas providing tax breaks and different incentives to the world’s largest E&E corporations. In 1972, Intel opened its first abroad manufacturing facility in Penang. Litronix, recognized immediately as ams OSRAM, did so the same year.
Malaysia’s standing as a producing heart has stagnated considerably for the reason that late Nineties, as a result of impression of the Asian monetary disaster and the emergence of China as a significant competitor. Based on one analysis by AMRO, the manufacturing sector’s share of GDP declined from 31 % in 1999 to 23 % in 2010. The sector’s share of employment fell from 23 % to 17 % over the identical interval.
However Malaysia’s lengthy expertise in back-end semiconductors manufacturing provides it a definite benefit over rivals like Vietnam, that are searching for to construct the trade kind of from scratch. None of this ensures success, however within the race to grow to be the subsequent regional tech superpower, Kuala Lumpur for the second enjoys pole place.
