KUALA LUMPUR, March 5 — Malaysia has struck a US$250 million (RM1.1 billion) deal with UK-based Arm Holdings Plc to secure semiconductor design licenses and technology over the next decade to move the country’s chip industry up the value chain.
Accordiing to Economy Minister Rafizi Ramli, the 10-year agreement aims to push Malaysia beyond its traditional role in chip assembly and testing, enabling local companies to design and develop their own semiconductors to compete in the global market.
“We have always wanted to move from the back-end — which is on testing and assembly — to the front-end,” said he said in an interview with Bloomberg Television.
“The government has taken a radical approach” to work with Arm “with the perspective of building the whole ecosystem,” he added.
With the pact, Malaysia is targeting the creation of 10 chip companies generating a combined US$20 billion in annual revenue, which could contribute an additional one percentage point to the nation’s GDP.
The longer term goal is to foster a local semiconductor industry capable of generating RM1.2 trillion in export revenue by 2030.
Currently, Malaysia plays a vital role in chip packaging and testing, hosting major players like Intel, GlobalFoundries, and Infineon Technologies, but the country has yet to make a significant impact in chip design.
The government previously pledged at least RM25 billion to bolster its semiconductor sector, with the goal of producing its own chips within the next five to ten years.
The ambitious plan comes amid worsening geopolitical uncertainties accelerated by US President Donald Trump’s erratic trade policies, which has heightened the focus on self-sufficiency in semiconductor supply chains.