This article first appeared in The Edge Malaysia Weekly on May 18, 2026 - May 24, 2026
MALAYSIA’S ambition to move up the semiconductor value chain received another boost on May 11, when local chip design firms SkyeChip Bhd (KL:SKYECHIP), Oppstar Bhd (KL:OPPSTAR) and GreatAsic Technology Sdn Bhd formally received offer letters from the government granting them access to Arm Holdings plc’s semiconductor design platforms.
The offer letters, presented during a ceremony officiated by Minister of Economy Akmal Nasrullah Mohd Nasir, mark yet another milestone in the country’s RM1.1 billion (US$250 million) strategic partnership with Arm, the British chip architecture giant owned by SoftBank Group Corp.
Under the latest allocation, GreatAsic secured access to Arm Flexible Access (AFA) and Arm Compute Subsystems (CSS), while SkyeChip and Oppstar obtained AFA licences.
SkyeChip, alongside Xenith Technology (Malaysia) Sdn Bhd, received offer letter to join Arm’s CSS platform in December 2025, effectively giving the company access to both of Arm’s key semiconductor development ecosystems.
The Arm partnership, signed through the Malaysian Investment Development Authority in March last year, is central to the country’s efforts to transform itself from a “Made in Malaysia” manufacturing hub into a “Made by Malaysia” innovation economy capable of producing globally competitive chipmakers.
The initiative provides two tiers of access: AFA, designed for start-ups and smaller semiconductor firms, and CSS, aimed at larger, more established companies developing advanced processors for data centres, cloud infrastructure and artificial intelligence (AI) workloads. Malaysia has allocated 25 AFA tokens and seven CSS tokens under the 10-year agreement.
The broader ambition is bold — seed at least 10 Malaysian semiconductor champions capable of collectively generating US$20 billion in annual revenue.
For SkyeChip, the Arm licences could significantly accelerate its push into high-performance computing and AI silicon.
Chief technology officer Teh Chee Hak says the company is still reviewing the definitive terms tied to its CSS access. If finalised, SkyeChip plans to allocate roughly RM82 million from its upcoming initial public offering (IPO) proceeds to developing a high-performance central processing unit (CPU) platform based on Arm CSS.
Should the definitive agreement not proceed, the funds will be redirected to custom compute and AI accelerator development, or alternative CPU architectures, he adds.
SkyeChip currently employs more than 360 engineers and plans to hire another 230 across Malaysia and Vietnam using its IPO proceeds. This represents a workforce expansion of nearly 60%.
According to Teh, access to Arm’s ecosystems provides more than licensing advantages. It also opens doors to leading semiconductor foundries while reducing development costs and time to market.
“With access to Arm’s CSS and AFA licences, we will develop and implement high-performance CPU and AI platforms designed to optimise performance for the server and edge computing environment,” he says.
Industry analysts view CSS access as particularly significant. Arm CSS provides pre-validated and pre-integrated CPU subsystem blueprints for cloud and data centre deployment. Without CSS, building a competitive server CPU from scratch would require five to seven years and hundreds of engineers.
SkyeChip’s proprietary memory interface intellectual property (IP) and network-on-chip IP are native complements to the CSS platform, interfacing directly with the memory and interconnect architectures CSS requires.
On a separate note, the Arm initiative has become entangled in political controversy.
In February, the Malaysian Anti-Corruption Commission (MACC) confirmed it had opened an investigation into a federal government agreement with a foreign company believed to be linked to the RM1.1 billion Arm deal. The probe also involves James Chai Jin Shern, a former aide to ex-economy minister Datuk Seri Rafizi Ramli, over his employment with a UK firm connected to the project.
Rafizi, widely viewed as the architect behind the Arm initiative, resigned from the cabinet in May 2025, just months after the programme was launched. Both Rafizi and Chai have since provided statements to MACC investigators.
Despite the political overhang, research houses remain broadly optimistic about the commercial implications for companies such as SkyeChip. “This partnership empowers SkyeChip to compete on the global stage while maintaining a lean, high-efficiency cost structure,” BIMB Securities wrote in a May 5 report.
PublicInvest Research said Arm CSS would help accelerate SkyeChip’s development of energy-efficient AI and data centre chips, while Tradeview Research highlighted the company’s growing competitiveness in both the Chinese and international markets.
As at Oct 31, 2025, SkyeChip had served 18 customers, while its outstanding order book stood at RM130 million for the financial year ended March 31, 2026 (FY2026), with deliveries extending into FY2027 and FY2028.
At the launch of its prospectus in April, executive director and CEO Datuk Fong Swee Kiang emphasised that the company had already spent years building chips independently using its own silicon IP.
“Our success over the last five years proves we have both the talent and technology directly linked to AI and high-performance computing. CSS is definitely a boost to our positioning,” he said.
At the IPO price of 88 sen, SkyeChip is valued at about 44 times historical earnings — a premium that appears steep at first glance, but is still broadly in line with Malaysia’s listed semiconductor peers.
According to AskEdge data, Inari Amertron Bhd (KL:INARI) shares are trading at about 38 times earnings, while Malaysian Pacific Industries Bhd (KL:MPI) commands around 47 times. Higher-growth peers such as ViTrox Corp Bhd (KL:VITROX) and Unisem (M) Bhd (KL:UNISEM) have significantly richer multiples of 74 times and 95 times respectively.
In many ways, SkyeChip’s trajectory encapsulates Malaysia’s broader semiconductor ambitions: transitioning from a manufacturing outpost to being a creator of globally relevant chip technologies in the AI era.
Read also:
Cover Story: SkyeChip positions for AI supercycle
Cover Story: SkyeChip’s philosophy and strategy explained
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