KUALA LUMPUR (April 24): The Ministry of Investment, Trade and Industry (Miti) will finalise a comprehensive strategic plan for the semiconductor industry to ensure Malaysia remains competitive in the sector.
“The semiconductor sector is critical to the country’s economy. Given our market share in the semiconductor industry, we need to have a concrete and strategic plan. The timeline given to us is until the end of May,” said Miti Minister Tengku Datuk Seri Zafrul Abdul Aziz.
Last week, Prime Minister Datuk Seri Anwar Ibrahim said the National Investment Council (NIC), which he chairs, had decided that Miti would draw up a comprehensive strategic semiconductor plan to attract international semiconductor companies to establish high-quality semiconductor manufacturing facilities in Malaysia.
“How do we ensure that we remain relevant and move up the value chain? What part of the supply chain do we want to focus on? We know other countries like the United States have announced the Chips Act, and Europe has also announced other legislation to promote investments in this area.
“If we want to move up the value chain, we must have a concrete and strategic plan,” Zafrul told reporters after the presentation of Miti’s first quarter report card.
He added that Miti will engage with all stakeholders and collaborate with other ministries, including the Ministry of Finance, to develop a plan that will address infrastructure, talent and incentive issues relevant to the semiconductor industry in Malaysia.
The US passed the Chips and Science Act in 2022, allocating around US$52.7 billion (RM251.8 billion) to boost domestic research and manufacturing of semiconductors.
Meanwhile, the European Union passed the European Chips Act (ECA) in 2023, mobilising around US$47.5 billion to reinforce the semiconductor ecosystem in the EU and reduce external dependencies.
Moving forward, Zafrul remained optimistic that the local semiconductor industry will benefit from the upcoming technology upcycle amid geopolitical tensions.
“The demand is strong, but there has been a lack of supply. We are optimistic that with the investment made globally [in this sector], the tech upcycle will benefit Malaysia because there are parts where the supply chain will be done through in Malaysia,” he said.
Despite the recent downcycle in the global semiconductor sector, Malaysia’s exportsof semiconductor devices and integrated circuits (ICs) attained positive growth of 0.03% to RM387.45 billion in 2023.
Malaysia holds a critical role in the global semiconductor supply chain, with some estimates chalking the country being responsible for 7% of semiconductor trade flows globally, as well as 13% of global backend operations.