Malaysia: A soaring semiconductor opportunity 

With decades of strength in assembly, testing, packaging and wafer fabrication, the nation is now moving further up the ladder, diversifying into chip design, advanced packaging and innovation to secure its place advancing the next frontier of technology.  

This ambition is backed by a clear national mandate. Under the New Industrial Master Plan 2030, the National Semiconductor Strategy (NSS) and the Thirteenth Malaysia Plan (13MP), semiconductors have been elevated as a “high growth, high value” sector, with priorities on targeted investment, supply chain integration and innovation-led growth. 

For investors, this translates into more than policy promises. Malaysia offers a mature manufacturing base, robust R&D capabilities and an industry-ready workforce, supported by coordinated facilitation from government agencies, including the Malaysian Investment Development Authority (MIDA).

Combined with its strategic geographical location at the heart of ASEAN and its chairmanship of the 10-nation bloc in 2025, the nation is positioning itself as the region’s natural hub for long-term growth and connectivity.

The one-year anniversary of the milestone of the NSS underscores Malaysia’s progress as a trusted node in the global semiconductor supply chain. 

From January 2024 to June 2025, Malaysia secured more than RM70.7 billion (USD16.0 billion) in approved investments under the NSS, with RM64.1 billion (USD14.5 billion) from foreign sources and RM6.6 billion (USD1.5 billion) from domestic investments.

Notable foreign-led projects include Carsem's advanced packaging technologies for energy efficiency and AI applications, NXP's semiconductor products, Syntiant's MEMS microphone and sensor operations, Plexus's manufacture and re-manufacture of printed circuit boards and the 200mm silicon carbide power fabrication facility built by Infineon - the largest in the world.¹ As of 3 September 2025, the NSS has also delivered on talent development, training 4,557 engineers and technical personnel while identifying more than 23,000 potential job opportunities. ²

Perhaps most significantly for Malaysia's long-term competitiveness, the country now has at least 13 homegrown companies across the semiconductor value chain emerging as potential national champions, a critical step toward the NSS goal of developing 10 Malaysian companies with revenues exceeding US$1 billion and 100 companies approaching RM1 billion in revenue.

The nation is accelerating investments, expanding local companies, building out R&D hubs and training specialist engineers.

This push comes amid a volatile global economy and supply chain, where predictability matters most. Malaysia’s stability and established track record provide that assurance, offering investors reliable capacity, resilient supply chains and a platform for deeper collaboration, from technology transfer to talent development. 

More than 50 years after its first plant opened in Malaysia, the local branch of global tech leader Texas Instruments continues to assemble and test analogue and embedded processing chips for industrial, automotive, personal electronics, enterprise systems and communications equipment, shipping to more than 100,000 customers around the world.  

Subbah Rao, vice president and country managing director for Texas Instruments Malaysia, says partnering with domestic firms has been important to that success.  

In the areas of automation and machine learning, he said, “Collaborating with local subject matter experts specialized in automation can enhance manufacturing efficiency, reduce reliance on manual processes and foster the integration of advanced automation technologies.” 

To meet its needs for high-precision tools and machinery, Texas Instruments is working with “multiple local experts” to deliver high-quality, cost-effective products, he said, while there are simultaneously close ties with local universities and research institutes to foster even greater innovation in semiconductor packaging, testing and automation. 

A dependable supply chain was also a pre-requisite for the company, which in 2023 announced significant expansion plans in both its facilities in Selangor and Melaka.  

“A resilient supply chain minimizes disruptions caused by unforeseen events, ensuring TI can meet customer demand,” said Subbah. “It also allows us to deliver products on time while maintaining quality standards and reducing lead times, which strengthens our market position and customer trust.” 

That sort of stability is also critical because it permits tech companies to “focus on research, development and scaling new products without being hampered by logistical uncertainties,” he added, as well as permitting Texas Instruments to adapt swiftly to global market changes. 

Subbah credits Texas Instruments’ longevity in Malaysia to MIDA’s role “as a bridge between business and government,” helping the company to put down firm foundations and continue to grow. 

With its roots firmly established in Malaysia’s fertile business soil, Inari Amertron Berhad, one of the leading Outsourced Semiconductor Assembly and Test (OSAT) service providers in the world, is firmly focused on expanding its business.

Malaysia offers a “unique combination” of advantages that make it an ideal base for the semiconductor sector, said KC Lau, Group CEO of Inari Amertron Berhad.

“There is a skilled and industry-ready workforce with semiconductor experience,” he pointed out. “There is a well-established electrical and electronics ecosystem, particularly in Penang, with precision engineering partners, research institutions, talent development centers and overall semiconductor value chains.” 

“It also helps that Malaysia enjoys a strategic location and connectivity to global markets, supported by a stable legal and business framework,” KC Lau said.  

Those benefits have enabled Inari Technology to develop advanced and new packaging solutions, provide high-volume assembly and testing of a range of devices, while simultaneously delivering engineering support for the introduction of new products, develop in-house a Manufacturing Execution System (iMES) and fully automatic processing equipment.  

KC Lau says the company would not have come so far, so rapidly without the full support of a government that is committed to making Malaysia a global leader in the semiconductor sector and has implemented strategic plans to achieve just that.  

Equally, MIDA “has been instrumental” in providing end-to-end facilitation for investment approvals and expansion plans, connected Inari Technology with incentive schemes and talent initiatives and “reinforced confidence in our growth trajectory,” he said.  

“We are continuing to expand in Penang to support next-generation RF, photonic, memory products and sensors,” he said. “We are moving up the value chain into advanced packaging for communication, AI and automotive applications. And looking ahead, we will deepen collaboration with local partners, drive digital and sustainable manufacturing and continue to build Malaysia as a trusted global semiconductor hub.” 

Malaysia’s semiconductor industry is climbing the value chain and securing a more competitive position in the global market, with MIDA shouldering a critical role in guiding and supporting foreign companies looking to tap into this growth.  

“The growing demand for chips driven by generative AI, IoT and electric vehicles necessitates Malaysia’s move into high-tech areas like IC design and production,” said Sikh Shamsul Ibrahim Sikh Abdul Majid, CEO of MIDA.

The agency works across government and industry to align opportunities with national priorities and emerging technologies, while serving as a single point-of-contact for investors.

“We see ourselves as your partner on the ground,” said Sikh Shamsul. “Our role is to make sure that your investments are not only commercially viable, but also future-ready.

“We work hand-in-hand with industry and government to smooth the process, from fast approvals to connecting you with incentives, local partners and the right talent,” he added. “And once you’re here, you can count on us to stay by your side as your business grows.”

“As the nation’s principal promotion agency, MIDA provides investors access to government fiscal and non-fiscal assistance, coordinates across agencies to simplify the investment journey and connects newcomers with local supply chains, talent pools and research institutions to strengthen ecosystem integration,” Sikh Shamsul added.

By anchoring advanced manufacturing and design capabilities, Malaysia is not only strengthening its own supply chain resilience but also generating positive ripple effects across the broader ASEAN community. Neighboring countries stand to benefit from new cross-border opportunities as Malaysia trains more engineers and moves up the value chain.

“In short, Malaysia’s progress is not just national,” Sikh Shamsul emphasized. “It contributes to ASEAN’s collective ambition to be a reliable, innovation-driven hub for high-tech industries and its ecosystem.” 

A reliable and trusted partner, Malaysia has a well-deserved reputation for ensuring stability across supply chains, innovative thinking and delivering long-term growth. The nation’s countless attributes make it the ideal investment hub in the ASEAN region and the collaborator-of-choice for a growing number of forward-thinking technology companies.  

References:
¹ https://www.bernama.com/en/news.php/?id=2448918
² https://www.nst.com.my/business/corporate/2025/09/1269661/malaysia-backs-indispensable-middle-role-global-chip-supply