GEORGE TOWN: The Penang Silicon Design @5km initiative has received significant backing with Prime Minister Datuk Seri Anwar Ibrahim's approval of RM50mil for the programme.
Anwar stated that the allocation is crucial to positioning Penang and Malaysia as a regional hub for the semiconductor industry, particularly in global IC Design and AI.
"The project is a major initiative which will establish our country as an important semiconductor hub for the region," he said during the official launch of the Penang Silicon Design @5km+ Initiative at Eastin Hotel on Saturday (Dec 7).
Anwar mentioned that the approved allocation will be spread over five years (RM10mil per year) and will help Penang elevate its position as a key player in the global semiconductor industry.
He noted that Chief Minister Chow Kon Yeow had requested modest funding of about RM12mil per year but remarked that if he were the chief minister, he would have asked for RM200mil.
He explained that he views the initiative as a source of pride for Penang and Malaysia, showcasing the country's strength and economic resilience.
"However, Chow understands our government’s constraints, so I’ve approved RM50 million to support and ease this initiative," he said.
He assured that the federal government will assist InvestPenang and encouraged them to continue working hard to make Penang great.
Led by the state government through its main agency, InvestPenang, this new initiative marks a significant leap forward in advancing the semiconductor value chain, accelerating artificial intelligence (AI) developments, and positioning Malaysia at the forefront of global technological innovation.
The initiative aims to create a unique and interconnected ecosystem for Integrated Circuit (IC) design and technology enterprises within a 5km+ radius of the Bayan Lepas Industrial Park.
Spearheaded by InvestPenang, this ambitious initiative will be supported by attractive incentive packages worth up to RM2mil annually for each company over a three-year period, alongside the establishment of a governance structure to oversee project implementation.
Earlier in his speech, Chow stressed the state’s commitment to strengthening Penang’s position in the global value chain in line with the New Industrial Master Plan 2030 (NIMP 2030) and the National Semiconductor Strategy (NSS).
He said attracting strategic investments remains a priority while creating infrastructure and a conducive environment to support high-impact activities.
"With over 350 multinational corporations (MNCs) and 4,000 small and medium enterprises (SMEs) operating in Penang, the state now hosts more than 30 integrated circuit (IC) design companies—the highest in Malaysia.
"This sector is projected to reach a value of USD84.16bil by 2030," he said.
He added that Penang also recorded nearly RM20 billion in service sector investments from 2019 to 2023, contributing 9% of the state’s total investments.
Recognising the sector’s vast potential, Chow said that Penang Silicon Design @5km+ was introduced as a proactive measure to bolster the state’s position in the IC design industry.
"This unique concept integrates all IC-related activities and ecosystems within a 5-kilometer radius+, driving economic growth through the creation of high-skilled jobs, increased investments, and sustainable technology development," he said.
Present during the launch were Investment, Trade, and Industry Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz, Finance Minister II Datuk Seri Amir Hamzah Azizan, Human Resources Minister Steven Sim Chee Keong, and Deputy Finance Minister Lim Hui Ying.
