This article first appeared in The Edge Malaysia Weekly on September 21, 2026 - September 27, 2026

When the Ministry of Science, Technology and Innovation (Mosti) decided to invest in semiconductor research and development (R&D) and capability-building, many critics pointed to how concentrated advanced packaging already is. Taiwan has the world’s most advanced packaging processes, and South Korea holds a commanding share of high-bandwidth memory (HBM) production. Malaysia, they said, is at zero. Why enter a race this far along? Why start running when the other runners are almost home?

I understand the concern, and I would begin by questioning the metaphor. This race does not have a finish line yet.

When the Madani government decided to invest in technology, we looked at both the numbers and the landscape. We saw that as artificial intelligence and high-performance computing demand greater processing power, shrinking transistors isn’t the only way to better performance, but how chips and components are connected and integrated matters. In addition, research firm Yole Group also put the advanced packaging market at around US$55 billion in 2025 and expects it to pass US$120 billion by 2031. Further to this, we realised that for advanced packaging, the rules of this game are still being written, and the industry is still evolving. TSMC has its own approach. Intel has another. AMD has yet another. Every leading chipmaker is still testing and refining its own view of how these technologies should work.

We concluded that if Malaysia were to venture into this, the first thing to focus on would be R&D. So, in 2024, Mosti launched three initiatives at Kulim Hi-Tech Park: the Industry Technology Innovation Centre (ITIC), the Semiconductor Research Consortium, and Mimos Academy.

ITIC gives companies, researchers and technology partners a place to develop, test and commercialise technologies. I truly believe that beyond manufacturing capacity, a strong semiconductor ecosystem needs good local capability in advanced packaging, testing, process technologies, equipment and applications. ITIC is where ideas are challenged with industrial problems so work can move from proof-of-concept towards market.

The Semiconductor Research Consortium brings industry, universities, research institutions and government-linked organisations together simply because no single company or university here can cover the whole technology landscape alone.

Mimos Academy builds the talent pipeline for the engineers, researchers, technicians and technology leaders that more advanced work will require.

Two years since the launch of these three initiatives, we can see the beginnings of what we set out to build. In 2025, ITIC ran 19 technical sessions involving around 400 participants from 60 industry and academic organisations. More than 1,000 students and graduates have gone through Mimos Academy programmes. The consortium has begun coordinating research that was previously scattered across institutions.

It is true that we are nowhere near being a global semiconductor leader. However, all of these are the beginnings of the capabilities we did not have before.

Which brings me back to the criticism we received and most of it reduces to one argument, that, the multinationals hold the market share, our own companies do not, and so the semiconductor numbers Malaysia cites are not really ours.

I agree that Malaysia is at or near zero in some of the advanced capabilities we now want to build. However, we need to be reminded that the country is nowhere near zero in the broader semiconductor industry. We account for roughly 13% of global semiconductor assembly, testing and packaging volume, according to the Malaysian Investment Development Authority (Mida), built over five decades of workforce development, clean room discipline, supply chain depth, manufacturing capability and customer relationships.

We are not coming to advanced packaging empty-handed. Although we are missing the next technology layer, we already have a strong foundation on which to build it.

To me, that is reason enough to begin.

I am also a strong believer that opportunity does not come to those who wait; it comes to those who seek it out. Let me share three examples of countries that started from behind and went on to build globally competitive industries. These examples have inspired me.

In 1968, South Korea had no steel industry, no iron ore and no coking coal. The World Bank refused to fund Posco, calling the project uneconomic. Yet, it was built on a fishing beach in Pohang, against Japanese, American and European steelmakers with a century’s head start. Within about two decades, Posco was among the largest and most cost-efficient steelmakers in the world.

In the 1970s, Taiwan’s major exports included plastics, textiles and umbrellas. Semiconductor manufacturing belonged to the US, Japan and Europe, and the major chip companies built and ran their own fabs. In 1987, TSMC was founded on the pure-play foundry model, an idea many doubted would work. It now manufactures the overwhelming majority of the world’s leading-edge logic chips.

China had almost no solar manufacturing capacity in the early 2000s, when Japan and Germany led the industry, yet, today it accounts for the overwhelming bulk of the global solar supply chain and has helped drive module prices down by roughly 90%. Also, it had no dedicated high-speed rail line in operation as recently as 2007, four decades after Japan’s Shinkansen. Today, it operates more high-speed railways than the rest of the world combined and exports the technology.

None of these countries waited until they already held every advantage.

Of course, we cannot pretend that every industrial policy bet will succeed. For every Posco, there are stories of national champions that absorbed public money and delivered very little. I feel that what separates successful bets from failed ones is rarely ambition but whether the bet is made on a capability with real demand behind it, whether it builds on strengths the country already possesses, and whether there is the discipline to measure progress honestly, and to stop, adapt, and recalibrate when things do not go as planned. That is the standard I want these investments held to.

The government cannot build a semiconductor industry on its own, and I am not suggesting otherwise. What the government can do is create the conditions in which Malaysian companies, researchers and talent can attempt things that would be too difficult, too expensive or too risky to attempt alone without support.

We are not claiming to be at the finish line, and we know we are not even halfway there. Nevertheless, we have started running. To me, comparative advantage is not always something a country inherits but something a country builds. While technology can be purchased, technical capability has to be developed.

In my next article, I will explain what comes next for the Malaysia Advanced Packaging Consortium (MAPC), the companies coming together, the investment behind it, and how we will measure whether we are succeeding.

Chang Lih Kang is the minister of science, technology and innovation

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