KUALA LUMPUR (Oct 1): The Malaysia Semiconductor Industry Association (MSIA) wants targeted tax relief for engineers under Budget 2026, as part of efforts to strengthen Malaysia’s talent pipeline and retain highly skilled professionals in the sector.
The industry body said incentives for engineers in in critical areas such as design and development (D&D), smart manufacturing and advanced equipment should complement broader measures to improve industry know-how.
MSIA president Datuk Seri Wong Siew Hai said the proposed Budget 2026 measures would help accelerate Malaysia’s transition from “Made in Malaysia” to “Made by Malaysia” under the National Semiconductor Strategy (NSS).
“Budget 2026 is a golden opportunity for Malaysia to move from Made in Malaysia to Made by Malaysia. By delivering targeted cost relief, talent incentives, and stronger support for research, development, commercialisation and innovation (RDCI), we can accelerate the implementation of the NSS and secure Malaysia’s place as a global semiconductor powerhouse,” he said in a statement on Wednesday.
Beyond talent development, the MSIA is also seeking relief on rising business costs. Its recommendations include stamp duty exemptions for employment and intercompany contracts, broader exemptions under the sales and service tax (SST) regime, relief for capital-intensive industries, and incentives linked to investments in energy efficiency and automation.
The association also proposed a qualified refundable tax credit (QRTC) to offset the impact of the global minimum tax, alongside grants for supply chain resilience and policies to diversify export markets.
On R&D, the MSIA said it hopes for a strategic Budget 2026 announcement that would help fund critical efforts in integrated circuit and system design, advanced fabrication, packaging and equipment technology.
The move, it said, would motivate companies to go beyond traditional R&D to encompass RDCI, ensuring that Malaysia delivers tangible industry impact while building globally competitive capabilities.
The government launched the NSS in May 2024 with a RM25 billion allocation, targeting RM500 billion in investments in its first phase. As of March 2025, Malaysia had secured RM63 billion in semiconductor investments, mostly from foreign investors, under the strategy.
Prime Minister Datuk Seri Anwar Ibrahim has previously said the NSS aims to foster the growth of 10 Malaysian semiconductor firms with revenues exceeding US$1 billion (RM4.2 billion) and more than 100 companies with revenues close to RM1 billion, while training 60,000 engineers for the industry.
In the field of education, the government is focusing resources on selected public institutions such as Universiti Malaysia Perlis (UniMAP), Universiti Sains Malaysia (USM) and Universiti Teknologi Malaysia (UTM) to serve as semiconductor centres of excellence.
It is also working towards improving science, technology, engineering and mathematics (STEM) education through special funding for schools and universities.
The MSIA said its proposals for Budget 2026 are designed to support this ambition by delivering cost relief, regulatory streamlining, talent incentives and stronger support for innovation, thereby accelerating Malaysia’s climb up the semiconductor value chain.
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