Malaysia To Attract Investment As Neutral EV Chip Manufacturing Hub?

Prime Minister Datuk Seri Anwar Ibrahim has announced that the National Semiconductor Strategy (NSS) will receive RM25 billion in federal investment to begin operations.

This considerable investment underscores the government's determination to position Malaysia as a worldwide chip industry leader.

During his keynote speech at Semicon Southeast Asia 2024, held at the Malaysia International Trade and Exhibition Centre, Anwar emphasised that the NSS is designed to stimulate collaboration with global players, particularly those in Southeast Asia.

He also talked about the NSS's three-phase strategy, which includes expanding current semiconductor production units and promoting foreign direct investment from major tech companies like Apple, Huawei, and Lenovo.

In Phase 1, Malaysia seeks to attract at least RM500 billion in domestic direct investment, with a focus on integrated circuit design, innovative packaging, and production equipment. Meanwhile, foreign direct investment will focus on wafer fabrication and production equipment.

The NSS also intends to build at least ten Malaysian enterprises specialising in design and advanced packaging, with revenues ranging from RM1 billion to RM4.7 billion, and to nurture at least 100 semiconductor-related companies with revenues reaching RM1 billion.

Furthermore, Anwar recognises the complexity and expensive costs of developing chip technology, but underlines that Malaysia would focus on other sections of the value chain.

He also mentioned that electric vehicles (EV) require about 3,000 chips, a much larger number than internal combustion engine (ICE) vehicles. Additionally, as the global EV market expands, Malaysia could become a key supplier of these EV chips.

Therefore the NSS would move Malaysia forward, placing the country as a neutral and non-aligned hub free from any sanctions and tariffs for semiconductor manufacture.