Allocation part of national plan to penetrate higher value chain
A TOTAL of RM75mil has been committed to boost Penang’s technology ecosystem.
A third of it from the Federal Government will fund a national automation, testing and equipment (ATE) campus in Batu Kawan, while Penang has committed RM50mil to a new technology fund.
Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir said the RM25mil allocation for the ATE campus was approved under the 13th Malaysia Plan (13MP), while the state government will provide the land.
“Based on the proposal and recommendations by Penang, it will also take into account best practices.
“They have modelled the campus proposal based on the Netherlands’,” Akmal Nasrullah said during the KL20 @ Penang 2026 summit held at the Penang Waterfront Convention Centre (PWCC).
He said the Federal Government would facilitate the project, including matters involving the land.
“This is part of the Federal Government’s continuous effort to directly assist Penang.”
He added that the RM25mil was on top of the RM50mil previously channelled by the Federal Government for Penang Silicon Design @5km+ (PSD @5km+) in Bayan Lepas.
KL20 is a national initiative aimed at positioning Malaysia as a global hub for investment, startups, technology and innovation.
Its Penang chapter focused on strengthening the state’s semiconductor and electrical and electronics ecosystem, particularly in higher value activities.
Penang Chief Minister Chow Kon Yeow took the opportunity to announce the RM50mil state technology fund aimed at addressing access to capital for startups and companies looking to scale up.
“As a start, the state has committed, as we announced earlier, to a technology fund.
“We hope it will become bigger with the participation of parties besides the Penang state government, so there will be a fund that startups and companies in Penang and throughout Malaysia can access.”
He said the initiative was in response to requests from companies facing difficulties in accessing capital.
On PSD @5km+, Chow said the initiative was aimed at building capabilities in integrated circuit (IC) design, artificial intelligence (AI), edge computing and innovation through talent development, shared infrastructure, incubation and commercialisation.
He said the initiative included about 30,000sq ft of incubation space, while the ATE campus would strengthen Penang’s ecosystem in automation, test equipment and AI-enabled manufacturing.
He said the ecosystem currently involved around 30 Tier-1 companies, 18 supporting companies and 20 Bursa Malaysia-listed companies.
“Together, these listed companies have a combined market value of about RM49bil as at September 2026, and generate RM5bil in revenue.”
On the wider semiconductor strategy, Akmal Nasrullah said the Federal Government has allocated RM9.25bil under 13MP to strengthen industrial development and move Malaysia into higher value activities.
He said RM4.9bil has been allocated for the Industrial Development Fund to attract multinational corporations (MNCs) and companies to Malaysia, including Penang.
Another RM3.3bil has been allocated for the Strategic Co-Investment Fund, allowing the Government to partner through grants and co-investment to further develop the industry.
The minister said RM1bil has been earmarked for the semiconductor sector, including a collaboration with ARM to bring intellectual property and design capabilities to Malaysia.
Akmal Nasrullah said Malaysia needed greater ownership of technology and intellectual property, particularly in areas such as semiconductor design and advanced packaging.
“For Malaysia, the next momentum is to penetrate into this higher value chain of semiconductors,” he said.
He also said Penang’s five decades of semiconductor experience placed the state in a strong position to help drive that transition.
“Malaysia has to move to the higher value chain in order for us to go for ‘Made by Malaysia’, rather than ‘Made in Malaysia’,” he said.
According to him, the focus in Penang now should be on scaling up its established capabilities and moving into higher value segments.
He also stressed the need to transition research and development (R&D) to production.
