Malaysia is making waves in the global tech industry with its ambitious plan to become a semiconductor powerhouse, and at the heart of this vision is the "Made in Malaysia AI Chips" initiative.
Backed by a US$250 million investment from UK-based Arm Holdings, a subsidiary of SoftBank, the country is positioning itself as a hub for cutting-edge AI chip design and manufacturing.
This strategic partnership marks a significant step in Malaysia’s journey to move up the semiconductor value chain and establish itself as a key player in the global AI and chip-making landscape.
Malaysia’s Bold Vision for AI and Semiconductors
Malaysia has long been a critical player in the global semiconductor supply chain, contributing approximately 13% of the world’s semiconductor assembly, testing, and packaging.
However, the country has traditionally focused on the lower-value segments of the industry. With the "Made in Malaysia" initiative, the government is shifting its focus to high-value areas like AI chip design and advanced manufacturing, aiming to transform the nation into a global leader in semiconductor innovation.
Prime Minister Anwar Ibrahim unveiled the initiative, which will leverage Arm Holdings’ expertise in semiconductor design and intellectual property (IP).
Under the deal, Arm will provide Malaysia with intellectual property (IP) licences and compute subsystems (CSS) for RM1.11 billion, to be paid over 10 years. In addition, Arm will collect royalties on chips sold. Details of the royalty were not disclosed.
This move is expected to create thousands of high-skilled jobs and attract further investments from global tech giants.
Arm Holdings: A Game-Changer for Malaysia’s Chip Industry
Arm Holdings, renowned for its energy-efficient chip designs that power billions of devices worldwide, is set to play a pivotal role in Malaysia’s semiconductor ambitions. The company’s investment and expertise will help Malaysia transition from being a manufacturing hub to a center of innovation in AI chip design.
According to Bloomberg, this partnership represents a “radical approach” to jumpstarting Malaysia’s chip-making capabilities, enabling the country to compete with established semiconductor leaders like Taiwan, South Korea, and the United States.
Minister of Economy Datuk Seri Rafizi Ramli said for each of Arm’s CSS, the government is looking to build a complete supply chain in advanced industries, such as AI data servers, autonomous vehicles, internet of things (IoT), and robotics.
The collaboration aligns with Malaysia’s National Semiconductor Strategy, which aims to enhance the country’s capabilities in chip design, fabrication, and advanced packaging.
By focusing on AI chips, Malaysia is tapping into one of the fastest-growing segments of the semiconductor market, driven by the increasing demand for AI-powered technologies across industries such as healthcare, automotive, and consumer electronics.
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