Malaysia stakes claim to become semiconductor superpower by luring $100B investment from … somewhere

Suggests itself as the place to do high-end manufacturing without upsetting anyone

Malaysia intends to court RM500 billion ($107 billion) worth of semiconductor industry investment, according to prime minister Anwar Ibrahim.

Speaking at a conference [YouTube video – English-language portion of Anwar's speech begins at 15:47] in Kuala Lumpur on Tuesday, the government head expressed the desire for the country to build on its current strengths as a provider of outsourced assembly and testing (OSAT) services and move into high-end manufacturing semiconductor design, enhanced OSAT and advanced packaging, plus production of sophisticated semiconductor manufacturing equipment.

To understand the magnitude of the PM's ambition, his $107 billion target tops the combined funds offered under the European Union (€43 billion/$47 billion) and US ($52 billion) CHIPS Acts.

Malaysia's plan is called the National Semiconductor Strategy (NSS) and calls for the establishment of ten local design and advanced chip manufacturing champions earning annual revenue of between $210 million and $1 billion, plus 100 "semiconductor-related companies" with revenue up to $210 million.

The prime minister envisioned those startups emerging as the result of a three-phase process. The first phase will leverage existing capacity to support modernizing OSAT, before moving toward advanced packaging, growing existing fabs, pursuing foreign investment to help expand local manufacturing capacity for old-school edge chips, and growing local design outfits.

"Phase two is all about moving to the frontier," Anwar said. To the prime minister, this means pursuing cutting-edge logic and memory chip design, fabrication, and testing.

The last phase sees domestic semiconductor design, manufacturing equipment and advanced packaging attracting buyers of advanced chips – such as Apple, Huawei, and Lenovo – to pursue sources of advanced manufacturing in Malaysia.

In Anwar's lengthy sales pitch – which touched on government incentives, multilingual workforce and free trade agreements – he offered Malaysia as a "bridge to connect countries open to tech collaboration."

Without directly mentioning conflict between China and the US, the prime minister suggested Malaysia is "offering itself as neutral ground that ensures all tech collaborations from the East and the West, North and the South."

"We also recognize that reaching the frontiers of chip technology is neither easy nor cheap," he added.

Malaysia has therefore committed $5.3 billion to advance some aspects of the NSS. But the PM's speech offered no detail on where $107 billion of investment will come from, when it will arrive, or where it will be spent. ®

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