PETALING JAYA: Malaysia’s cost advantage within the global semiconductor value chain continues to attract investment, even as the country moves to capture greater value through higher-end activities.
The country remains competitively positioned on labour costs relative to the United States, while still holding its ground against key regional peers such as Taiwan and China, said RHB Research.
This advantage is drawing interest from semiconductor firms, namely from China and Taiwan, which are looking to expand design operations.
RHB Research also noted that Malaysia’s long-term strategy is increasingly focused on moving up the value chain.
“Value creation is increasingly concentrated in chip architecture, system design and intellectual property ownership,” it said, highlighting the country’s pivot towards integrated circuit (IC) design as the next phase of industry evolution.
Policy momentum is accelerating this transition such as government-backed initiatives under the National Semiconductor Strategy, alongside state-level programmes that help to build out the IC design ecosystem.
Key developments include dedicated hubs such as the Malaysia Semiconductor IC Design Park in Selangor and the IC Design and Digital Park in Penang, which provide shared infrastructure, access to electronic design automation tools and early-stage funding.
The research house noted a major catalyst here is Malaysia’s partnership with Arm Holdings Plc, valued at US$250mil.
The collaboration grants local firms access to Arm’s Compute Subsystems, enabling them to leverage pre-validated processor architectures and system-level intellectual property.
“This significantly reduces the cost and complexity of advanced chip design.
“This shortens development cycles and accelerates time-to-market, enabling Malaysian firms to focus on system-level differentiation and application-specific designs in high-growth segments such as artificial intelligence (AI), data centre and automotive semiconductors,” the research house said.
It also noted that Bursa-listed Oppstar Bhd
is expanding capabilities across advanced nodes and complex system-on-chip designs, while shifting towards longer-term partnerships to improve revenue visibility.
Meanwhile, Microsoft Corp, another American multinational technology conglomerate, has highlighted Malaysia’s importance as a silicon design support hub, particularly as demand rises for customised chips in AI and cloud infrastructure.
