Malaysia is making bold strides to strengthen its position in the global semiconductor market. With government incentives and major foreign investments fueling growth, the nation is moving beyond traditional assembly and testing toward advanced chip packaging and design capabilities.
Strategic Growth and Market Strength
The Malaysia Semiconductor Industry Expansion is anchored by impressive growth forecasts. The market is expected to reach USD 10.85 billion in 2025, growing at a CAGR of 8.76% to hit USD 16.51 billion by 2030. This sustained momentum reflects strong investor confidence and a supportive industrial policy environment.
Malaysia’s semiconductor sector already plays a vital role globally, contributing about 13% of worldwide semiconductor testing and packaging output. This share underscores the nation’s integral role in the global supply chain, bridging high-tech production between East Asia and Western markets.
Major Investments Fueling the Expansion
One of the strongest signals of growth comes from Intel’s US$7 billion investment in a new facility, which highlights Malaysia’s reliability and appeal to global players. The new plant aims to expand advanced packaging and testing capacities, reinforcing the country’s dominance in back-end manufacturing.
At the same time, ARM’s US$250 million investment marks a major step forward for Malaysia’s chip design ambitions. This move supports a shift from a manufacturing-focused model to one that emphasizes innovation, R&D, and high-value design engineering.
Building High-Tech Hubs and Jobs
Key industrial zones such as Kulim High Tech Park in Kedah are witnessing the development of new semiconductor fabs specializing in silicon-carbide and substrate production. These advanced facilities aim to meet the rising demand for power electronics and energy-efficient chips — sectors critical to the electric vehicle and renewable energy industries.
The expansion also translates into substantial job creation. The semiconductor ecosystem currently supports around 100,000 jobs, with more opportunities emerging as international players continue to establish operations in the country.
A Future-Ready Ecosystem
Malaysia’s integrated circuits already dominate its semiconductor exports, accounting for 71.4% of total output. Backed by decades of expertise, the country is enhancing its competitiveness through design-focused investments and talent development programs.
By 2028, the semiconductor output is expected to grow at a CAGR of 7%, reaching USD 46 billion. This growth will position Malaysia not only as a manufacturing leader but also as a hub for design, innovation, and advanced technology solutions.
As the global semiconductor race intensifies, Malaysia’s combination of scale, innovation, and strategic location is propelling it to the forefront of Asia’s technology supply chain. With both established industry giants and new investors expanding operations, Malaysia’s semiconductor journey represents a model for sustainable, innovation-led industrial growth.
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