Malaysia goes for even more semiconductor growth

Malaysia goes for even more semiconductor growth

Malaysia is apparently targeting an estimated US$107 billion – or more – in investment for its semiconductor industry, an industry in which it is already well established, accounting for 13% of global testing and packaging, according to some reports.

In fact Reuters says it has already attracted multibillion-dollar investments from companies like Intel and Infineon.

According to comments this week from Prime Minister Anwar Ibrahim, the planned investment will go towards integrated circuit design, advanced packaging and manufacturing equipment for semiconductor chips.

Anwar Ibrahim added that Malaysia also wants to establish at least ten local companies in design and advanced packaging for semiconductor chips, with revenues between US$210 million and US$1 billion.

The Prime Minister added that Malaysia will allocate US$5.3 billion in fiscal support to meet these targets. Further details are to be announced later.

This isn’t the only large-scale initiative Malaysia is pursuing in semiconductors and related sectors. We reported in April on plans to build Southeast Asia’s largest integrated circuit design park as part of Malaysia’s efforts to move beyond backend chip assembly and testing and into high-value front-end design work.

Indeed as investors become wary of China, Malaysia may be in a good position to win even more business in the semiconductor sector.

But if Malaysia is trying to position itself as a global manufacturing hub there may be a caveat, if a recent story in Channel News Asia is correct. It suggests that Malaysia needs 50,000 skilled engineers in its booming semiconductor sector, but that universities are producing only about 5,000 engineers a year.

The news service points out that, though Malaysia is the sixth-largest exporter of semiconductors in the world, it faces a severe shortage of talent.


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