KUALA LUMPUR (Oct 5): Budget 2027 is unlikely to feature one large allocation for Malaysia’s semiconductor push, with support instead expected to come through more targeted measures, according to Apex Securities.
The research house said these could include funding, incentives, talent development and efforts to strengthen the local technology ecosystem.
“The key signal will therefore be the size and scope of incremental measures announced,” Apex said in a research note on Monday.
Among the areas to watch are further support for semiconductor development, IC design and advanced packaging, as well as measures to address the industry’s need for skilled workers.
Apex Securities is also looking for support for data centre infrastructure, power availability and efforts to deepen multi-national companies’ supply chains in Malaysia.
The expectations come as Malaysia continues to push its semiconductor industry into higher-value activities.
Under the National Semiconductor Strategy launched in 2024, the government aims to provide at least RM25 billion in fiscal support, build 110 local semiconductor companies and train 60,000 highly skilled engineers.
Budget 2026 included RM550 million for semiconductor ecosystem partnerships, RM500 million in financing for higher-value electrical and electronics research and design, and funding for AI, electric vehicle and semiconductor training.
The push for more targeted support comes as technology companies are already facing capacity and talent constraints.
Apex Securities’ recent checks with companies in Penang showed that AI-driven demand remains strong into 2027 and 2028, but several players are operating close to full capacity while dealing with longer equipment lead times, shortages of certain inputs and difficulty retaining experienced engineers.
The semiconductor industry has also been pressing Putrajaya for more targeted support ahead of Budget 2027.
The Malaysia Semiconductor Industry Association on Sunday called for stronger research and automation incentives, easier access to specialised foreign talent and measures to reduce the cost and complexity of doing business as competition for global semiconductor investment intensifies.
The calls come as manufacturers in Penang are already grappling with tight capacity despite strong orders. Industry players told The Edge recently that factories were operating close to full capacity, while specialised equipment can take six months or longer to arrive and skilled engineering talent takes years to develop.