PETALING JAYA: Salaries for major tech positions in Malaysia have surpassed that in Japan for the first time, driven by growing investment in the former’s rapidly expanding semiconductor sector and increasing competition across digital industries.
This was according to findings from specialist recruitment and workforce solutions provider, Hays.
Citing regional data, Hays Specialist Recruitment Japan noted that at the executive level, the upper range of annual salaries for chief technology officers in Malaysia rose 27% year-on-year to 28 million yen, surpassing Japan’s 26 million yen, which remained unchanged from the previous year.
Meanwhile, top salary ranges for roles like information technology (IT) directors in Malaysia also reached up to 28 million yen, compared with Japan's 25 million yen.
The annual salaries of research and development directors (electronics) in Malaysia, meanwhile, stood at 18 million yen, compared with Japan’s 15 million yen.
Grant Torrens, managing director of Hays Specialist Recruitment Japan, was quoted by Nikkei Asia as saying that “Malaysia had seen aggressive salary growth in recent years.”
He said this growth was supported by strong foreign direct investment and government efforts to grow its Penang semiconductor hub in the country's north.
"Malaysia's salary increase is structural rather than cyclical. Of course, it will reach an equilibrium where it starts to cool off, like what we're seeing in China now, but I don't think this is a one-year phenomenon.
"Malaysia is transitioning from a manufacturing hub to an innovation-driven research and development hub, so salaries are likely to keep rising for some time,” he was quoted as saying.
An industry observer noted that Malaysian tech workers don’t always earn more than those in Japan.
However, he said that in certain roles - especially senior or highly specialised ones - the gap has been narrowing and can even favour Malaysia.
“One key reason is Malaysia’s fast-growing tech sector, which is facing a shortage of skilled workers. Because demand is high and supply is limited, companies are offering higher salaries to attract and retain talent.
“This effect is amplified by foreign investment, as multinational companies entering Malaysia tend to pay closer to global market rates and compete aggressively for the same talent pool.”
In contrast, he said Japan’s tech salaries are shaped by more traditional structures.
“Many companies still follow seniority-based pay systems, where wages increase gradually with age and tenure rather than skill or performance.
“Combined with decades of relatively slow wage growth, this keeps salaries from rising as quickly - even in high-demand fields.”
He added the growth trajectory was another factor.
“Malaysia’s tech salaries are increasing rapidly from a lower base, while Japan’s are more stable. This means Malaysia is catching up quickly in certain areas.
“Cost of living also plays a role. Japan is generally more expensive than Malaysia, so even when salaries appear similar, Malaysian workers may have greater purchasing power.”
Meanwhile an analyst said this trend (of local tech employees earning higher salaries than their Japanese counterparts) doesn’t apply across the board.
“On average, tech salaries in Malaysia are still lower than in Japan. The cases where Malaysia matches or exceeds Japan tend to be in mid- to senior-level roles, particularly in fields like artificial intelligence (AI), cloud computing and semiconductors.
“In short, the difference comes down to faster growth and stronger competition for talent in Malaysia, versus slower, more structured wage progression in Japan,” he said.
Another industry observer said IT specialists in Malaysia tend to earn relatively higher salaries than those in some other Asian countries due to a combination of market demand, government efforts and industry presence.
“However, they still earn less than top-paying markets like Singapore or Japan.
“One key reason is demand outpacing supply. As Malaysia pushes into areas like cloud computing, cybersecurity and AI, there aren’t enough highly skilled professionals to meet industry needs. This shortage drives up salaries, especially for experienced specialists.”
He noted that government initiatives also play a role.
“Organisations like the Malaysia Digital Economy Corp promote digital growth and attract foreign investment, which increases competition for talent and raises pay levels.”
Additionally, he highlighted that many multinational companies have established regional hubs in cities such as Kuala Lumpur and Penang.
“These companies often offer higher salaries to secure skilled workers, while still benefiting from lower overall costs compared to places like Singapore.
“Malaysia also sits in a cost-effective position globally. Salaries are attractive locally, but still relatively affordable for international companies when converted into foreign currencies, making the country appealing for outsourcing and regional operations.”
