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Malaysia’s semiconductor industry anticipates a robust resurgence in the second half of 2024, backed by optimistic forecasts and strategic positioning to capitalise on global tech demand. The Ministry of Investment, Trade, and Industry (MITI) is poised to embark on a transformative journey with the unveiling of a comprehensive Semiconductor Strategic Plan aimed at positioning Malaysia as the premier investment destination for the semiconductor industry. Prime Minister Datuk Seri Anwar Ibrahim announced this strategic initiative following the deliberations held during the National Investment Council (NIC) Meeting Number 3 of 2024, which he chaired earlier today.
At the heart of this strategic endeavour lies the ambition to fortify Malaysia’s foothold in the semiconductor sector by incentivising and catalysing high-tech semiconductor activities, particularly focusing on fostering front-end operations within the industry.
The Prime Minister emphasised the pivotal role of offering an enticing incentive package to allure international semiconductor giants, aiming to entice them to establish state-of-the-art manufacturing facilities in Malaysia. This move is expected not only to enhance the country’s technological capabilities but also to spur economic growth and job creation.
During the NIC meeting, extensive discussions were conducted regarding Malaysia’s current position and future prospects in the semiconductor industry. The meeting also explored various expansion proposals aimed at bolstering the sector’s growth trajectory, emphasising the importance of strategic investments and partnerships to drive innovation and competitiveness.
The Prime Minister underscored the government’s commitment to providing robust support and an enabling environment for the semiconductor industry, recognising its significance as a key driver of economic development and technological advancement.
In addition to discussions on the semiconductor industry, the NIC meeting also deliberated on the proposal for the development of the Kerian Integrated Green Industrial Park (KIGIP). Endorsing this proposal, the government aims to establish KIGIP as a joint venture between government-linked investment companies (GLICs), the federal government, and the Perak government.
Positioned as a strategic initiative to attract green investments, KIGIP will operate exclusively on Renewable Energy (RE), aligning with Malaysia’s ambitious targets for environmental sustainability and carbon neutrality.
Meanwhile, Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz reiterated the importance of the forthcoming Semiconductor Strategic Plan, underscoring its alignment with the objectives outlined in the New Industrial Master Plan 2030 (NIMP 2030). The plan prioritises investments in wafer fabrication activities as part of broader efforts to strengthen Malaysia’s position as a major player in the semiconductor sector regionally and globally.
Tengku Zafrul highlighted the critical role of the strategic plan in attracting international semiconductor firms to invest in Malaysia, underscoring its potential to drive technological innovation, create high-value jobs, and propel sustainable economic growth.
The Malaysian semiconductor sector anticipates a resurgence in the latter half of 2024, poised to emerge as a pivotal player in the global recovery post-2023 downturn. Bolstered by the World Semiconductor Trade Statistics (WSTS) projection of a 13.1% rebound in the global semiconductor market, valued at US$588 billion (RM2.8 trillion), the Malaysia Semiconductor Industry Association (MSIA) remains optimistic about the sector’s trajectory.
Despite a global semiconductor sales dip of 8.2% to US$527 billion in 2023, Malaysia maintained its market resilience, notably reflected in the electrical and electronics (E&E) sector, with exports experiencing a marginal 3.0% decline. Integral to this resilience were the semiconductor device and integrated circuit (IC) exports, registering a modest 0.03% growth to RM387.45 billion in 2023.
Moreover, amid ongoing geopolitical uncertainties, Malaysia emerges as a preferred “Plus One” destination for multinational companies, seeking to diversify their production and supply chain operations. The nation’s strategic allure is underscored by its growing prominence in the electric vehicle (EV) market and its pivotal role in the global semiconductor supply chain.
As Malaysia navigates this transformative phase, collaboration among stakeholders, coupled with strategic incentives and ecosystem enhancements, will be instrumental in optimising the sector’s potential and reinforcing its position in the global semiconductor landscape.
