In recent years, Malaysia has been transforming into a strategic hub in the semiconductor industry. Amid growing technological tensions between the U.S. and China, global chip manufacturers are striving to diversify their production sources. In this context, ARM Holdings, backed by SoftBank, is entering a new partnership with the Malaysian government.
ARM has announced that it has signed an agreement with the Malaysian government to strengthen the country's chip design ecosystem. According to Reuters, under this deal, the Malaysian government will acquire $250 million worth of chip designs and technologies from ARM over the next 10 years. Malaysia’s Economy Minister Rafizi Ramli stated that the agreement includes licensing seven chip design models from ARM.
Additionally, ARM will support the training of 10,000 engineers in Malaysia in chip design and manufacturing. While the company has not provided further details, official comments from the Malaysian government have not yet been received.
Malaysia’s Rise in the Chip Industry
The Malaysian government is taking significant steps to become a global leader in chip manufacturing. Earlier in 2024, the country announced plans to produce its own graphics processing units (GPUs) for artificial intelligence and data centers.
In 2023, Malaysia committed at least $5.3 billion in financial support and announced plans to train 60,000 engineers under its National Semiconductor Strategy (NSS). The main objectives of this strategy are to develop the country's semiconductor infrastructure, establish an advanced chip supply chain, and attract top global technology companies.
Malaysia already has over 50 years of experience in the semiconductor industry and currently provides about 13% of the world’s chip testing, assembly, and packaging services.
Intel was one of the first major players to invest in Malaysia, establishing its first overseas production facility in Penang in 1972 with a $16 million investment. In 2021, Intel announced a $7 billion investment to build a new chip assembly and testing facility in the country. Other major semiconductor companies, including GlobalFoundries and Neways, are also expanding their operations in Malaysia.
Additionally, tech giants such as Google, Microsoft, and Nvidia have collectively announced multi-billion-dollar investments in Malaysia since 2023, primarily in AI development projects, cloud services, and data centers. These large-scale initiatives confirm Malaysia’s ambition to establish itself as a global leader in advanced semiconductor manufacturing.
