Malaysia sets up chip-design hub to ‘drive demand’ for semiconductor industry

Malaysia has set up a chip-design hub in Selangor state to boost its semiconductor industry and attract foreign investments.

The Southeast Asian nation is seeking to improve its chip design capabilities and move up from testing and packing – activities that traditionally have been considered less complex and of lower value.

“The interest in data centres will continuously drive the demand for semiconductors,” Economy Minister Rafizi Ramli said on Tuesday. “At some point, we want to move away from using chips that are designed elsewhere. We want to see more data centres in Malaysia using chips designed by Malaysians.”

The Malaysia Semiconductor IC Design Park’s partners include software maker Cadence Design Systems Inc. and chip company Arm Holdings Plc. The integrated-circuit design hub is located in Puchong, near the capital of Kuala Lumpur.

Malaysia hosts a number of chip packaging facilities for Intel Corp., GlobalFoundries Inc. and Infineon Technologies AG, making it a key regional hub in the global supply chain. It has also attracted Chinese chip firms in search of a place with easier access to foreign capital and technologies.

The Southeast Asian nation earlier this year pledged at least 25 billion ringgit (US$5.6 billion) to support its semiconductor industry, seeking to increase its role as tensions between the US and China shake up global supply chains.

Malaysia’s semiconductor industry aims to double its exports to 1.2 trillion ringgit (US$270 billion) by 2030, cementing its position as the sixth-largest chip exporter in the world.