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Malaysia to invest $107bn in front-end chip design

Malaysia has become the latest country to announce a huge state-backed support programme for its domestic chip market.

This week, the country's prime minister Anwar Ibrahim announced the government will invest 500 billion ringgit (USD 107 billion) to support the development of integrated circuit design, advanced packaging, and manufacturing equipment for semiconductors.

He said the long term aim is to create 10 Malaysian design and advanced semiconductor packaging companies, each with revenues between USD 210 million and USD 1 billion.

"We have a strong capacity to diversify and move higher in the value chain… to move towards even more high-end manufacturing, semiconductor design, and advanced packaging, Ibrahim said.

Analysts believe around 13% of global chip testing and packaging takes place in Malaysia. The country has been pretty successful in attracting overseas firms. Among those to invest are Infineon, Microsoft, ATX and Intel. Indeed, in August 2023, Infineon announced it would invest $5.4 billion to expand its power chip plant in the country.

Last year, a report by IDC anticipated that Southeast Asia will become a more significant player in the semiconductor assembly and test market, particularly in Malaysia and Vietnam. It projected that, by 2027, Southeast Asia could account for 10% of the world's semiconductor assembly and testing, while Taiwan's share will fall to 47% from 51% in 2022.


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June 13 2024 1:49 pm V22.4.55-1