Malaysia Seeks to Become Chip Hub Amid Trade Tensions

Malaysia on Tuesday laid out plans to develop the country as a global chip hub, including allocating at least $5.3 billion in fiscal support and training 60,000 engineers.

The Southeast Asian country unveiled a strategy to bolster its semiconductor industry, and aims to attract investments of at least 500 billion ringgit ($106.45 billion) in areas including chip design, advanced packaging and manufacturing equipment.

Malaysia is a key part of the global semiconductor supply chain, and has been positioning itself as a neutral location for chip production amid an escalating chip rivalry between the U.S. and China.

"Today, I offer our nation as the most neutral and non-aligned location for semiconductor production, to help build a more secure and resilient global semiconductor supply chain," Prime Minister Anwar Ibrahim said in a speech.

Anwar said the government plans to allocate MYR25 billion to provide targeted incentives.

Malaysia also aims to establish at least 10 local companies specializing in design and advanced packaging, he said.

Under the strategy, Malaysia seeks to train and upskill 60,000 high-skilled local engineers in order to position the country as a global research and development hub for the semiconductor sector.

Malaysia's existing robust semiconductor and automotive industry infrastructure can help address global companies efforts to build up their production capabilities outside China to serve the U.S. and global markets, CIMB Securities analyst Mohd Shanaz Noor Azam said in a recent note.

Source: Market Watch