Malaysia’s Prime Minister Anwar Ibrahim said Tuesday that the government will allocate at least MYR 25 billion ($5.3 billion) in fiscal support to operationalize the three phases National Semiconductor Strategy (NSS) with targeted incentives.

In his keynote address at the launch of Semicon Southeast Asia 2024, he said the government aims to court at least MYR 500 billion ($106.26 billion) of investments in Phase 1, with domestic direct investment (DDI) focusing on IC design, advanced packaging and manufacturing equipment, and foreign direct investment (FDI) focusing on wafer fabs and manufacturing equipment.

He said that by Phase 2, the government wants to establish at least ten Malaysian companies in design and advanced packaging with revenues between MYR 1 billion to MYR 4.7 billion ($210 million to $1 billion), and at least 100 semiconductor-related companies with revenues close to MYR 1 billion ($210 million), creating higher wages for Malaysian

He said the government also plans to develop Malaysia as a global research and development (R&D) hub for semiconductors, featuring world-class universities, corporate R&D, and centers of excellence, blending the very best of Malaysian and international talent.

He said the government will also train and upskill 60,000 high-skilled Malaysian engineers.

According to Anwar, the phase 1 of the strategy involves building on Malaysia’s foundations.

In this phase, he said the government will leverage on its industry’s existing capacity and capabilities to support the modernization of outsourced semiconductor assembly and test (OSAT) with moves towards advanced packaging; grow existing fabs in Malaysia and pursue FDI on expanding capacity in trailing edge chips, particularly power chips; as well as develop local chip design champions.

Describing phase 2 of the strategy as “moving to the frontier, he said the government will pursue cutting edge logic and memory chips design, fabrication, and testing and looking to integrate the purchasers of these chips.

Once Phase 1 is implemented, he said more leading advanced chips manufacturers will be attracted to Malaysia’s shores.

“This is where our local design champions can be easily integrated into the ecosystem of these advanced fab companies,” he said.

As for the phase 3 which is about “innovating at the frontier, he said this phase is to continue doubling down by supporting the development of world-class Malaysian semiconductor design, advanced packaging and manufacturing equipment firms, while at the same time attracting the buyers of advanced chips such as Apple, Huawei, Lenovo, and other such cutting-edge companies to pursue advanced manufacturing in Malaysia.

“To stay flexible and agile, the NSS will be a living document, evolving as needed, but we remain steadfast in our aspiration to make Malaysia a major global player in accessible technology for all, powered by our semiconductor industry,” he said.

In reaffirming Malaysia’s commitment to becoming a global leader in the semiconductor industry, he said the National Semiconductor Strategic Task Force (NSSTF), with CREST serving as the Secretariat, will focus on fostering innovation, enhancing research and development capabilities, and driving the commercialization of semiconductor technologies.

Anwar also reiterated the government aims to have 40 percent of Malaysia’s primary energy mix from renewable sources by 2035.

He said this initiative aims to reduce carbon dioxide emissions by 10 million tonnes annually and achieve 100 percent renewable energy by 2050.

He said the government supports exploring new technologies like green hydrogen, nuclear technology, and large-scale energy storage to reduce dependence on fossil fuels and meet the 2016 Paris Accords’ targets.

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