Global spotlight on Malaysia as it emerges as semiconductor powerhouse

KUALA LUMPUR: Malaysia’s vibrant semiconductor industry has been the talk of the town of late as the country emerges as a new semiconductor powerhouse with the global spotlight on Penang.

The World Economic Forum (WEF) stated on its LinkedIn page that Penang has major industry players from Europe and the United States setting up units or expanding existing operations as they seek to build new global supply chains for these vital components.

"Semiconductors are also known as microchips or integrated circuits, they are the fundamental building blocks of today's digital world,” it said in a video post today.

It noted that there are more than 100 billion semiconductors in daily use around the world, but the supply chain is increasingly vulnerable because semiconductor manufacturing is highly concentrated.

According to the WEF, Malaysia has become a destination for those seeking new options.

"In 2023, Penang attracted US$12.8 billion in foreign direct investment. More than in the previous seven years combined, Intel, for example, has invested US$7 billion (US$1 = RM4.76) in a new plant in Penang,” it noted.

Prime Minister Datuk Seri Anwar Ibrahim posted the WEF video on semiconductor on his own Facebook account and said that under the MADANI Government, Malaysia is committed to building a new, high-tech, innovation-driven future for the country. "With high value investments from global firms, resulting in high-paying jobs for more Malaysians, I have absolute confidence in the potential of every Malaysian, in the bright prospects for our economy, and our shared future as a nation,” he said.

Similarly, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz posted the same WEF video on his 'X' platform with the caption 'Malaysia - the new semiconductor powerhouse'.

Besides the WEF, major media also reported that Penang has in recent years won new chip sector investments from multinationals, including Lam Research, Infineon Technologies, Texas Instruments, Micron Technology, Bosch, Advanced Semiconductor Engineering (ASE) and Intel.

According to the international media, the investments have reinforced Malaysia's entrenched position in the late stages of the semiconductor supply chain, particularly chip assembly, testing and packaging, areas in which it holds a 13 per cent share of the global market.

"Chip design could be a more promising area for Malaysia than fabrication. A few local companies, such as Oppstar Technology, can already provide design services for advanced chips.

"Malaysia must quickly seize opportunities in chip design to move up the semiconductor value chain as competition intensifies,” one report said.

The international media also noted that when Oppstar listed on the Malaysian stock exchange last year, investors flocked to the initial public offering despite a globally weak public listing activity and that it was oversubscribed by 77 times, pushing the stock price up 286 per cent on the first trading day.

Founded in 2014, Oppstar designs transistor models used for chips from the 20-nanometer level and below, all the way to the most advanced three-nanometer chips. - Bernama