KUALA LUMPUR (Oct 21): High capital requirements remain a major hurdle for Malaysian semiconductor design firms despite being granted subsidised access to UK-headquartered ARM Holdings plc's blueprints for chip components.
Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani told the Dewan Rakyat on Wednesday that Xenith Technology (automotive chips), SkyeChip and GreatAsic Technology (data centres), and Oppstar Technology (mini server chips) had been granted Compute Subsystem tokens to use ARM's designs under an initiative introduced by the Economy Ministry in 2025.
He said the subsidised access was worth RM30 million to RM40 million, and allowed Malaysian firms to complete novel chip designs faster and more cheaply.
“When they receive the token, it saves two years of time...to jump-start and have our own IP (intellectual property),” Johari said, adding that four of seven CSS tokens and four of 25 AFA tokens have been allocated so far.
He added that completing a chip design can cost between US$50 million (RM212 million) for simpler chips and US$300 million for complex architectures over two to two-and-a-half years.
“This is one of the limitations we see where local companies...are usually handicapped in terms of capital,” he said.
Johari was responding to Datuk Dr Ku Rahman Ku Ismail (PN-Kubang Pasu), who wanted updates on the collaboration with Arm Holdings, as well as the New Incentive Framework (NIF) introduced by Miti and the Malaysian Investment Development Authority (Mida) in March to promote better quality investments.
Johari said tax holidays under NIF had an outcome-based approach, focusing on high manufacturing complexity to curb reliance on low-skilled foreign labor, strong domestic supply chain linkages, and high-income job creation.
On talent development under the National Semiconductor Strategy (NSS), Johari said 22,849 high-skilled workers have been trained as of the third quarter of 2026, and the target was to train 60,000 engineers by 2030.
Addressing concerns raised by Yeo Bee Yin (PH-Puchong) on wage competitiveness and talent retention, Johari said that while starting salaries for technicians begin around RM3,000 and junior engineers at RM3,500, compensation scales significantly with experience.
"If we look at salaries, for an engineering manager, the range is very wide…from RM12,000 to RM25,000 depending on experience, whether in front-end, wafer fabrication, or back-end. For IC design and R&D specialists, it ranges from RM8,000 to RM25,000," Johari said.
Johari acknowledged that salaries in countries like Singapore, South Korea, Taiwan or the UK can be two to three times higher, but living costs in Malaysia are still relatively lower.
"If compared with work offers overseas, surely the salary might be two to three times higher, but their cost of living there will also increase," Johari said.
He added that Miti is coordinating with the Human Resources and Higher Education Ministries, educational institutions and industry players to gather data on job placements across subsectors and assess talent retention.
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