Malaysia’s Prime Minister outlines leadership ambitions in energy and chip manufacturing

The Malaysian government aims to position itself as a hub for energy and chip manufacturing this year, leveraging its geography and experience in these areas, the country’s prime minister said yesterday.

Speaking at an economic forum in Kuala Lumpur, Anwar Ibrahim, who is also Finance Minister, said the Malaysian economy has seen robust growth in 2024, boosted by a slate of significant foreign investments in the high-tech sector, including artificial intelligence (AI ). ) infrastructure.

“By 2024, Malaysia will have successfully tamed inflation, reduced unemployment and stabilized our currency,” he said told the Malaysia Economic Forum 2025according to the Star newspaper. “We have achieved record highs in job creation, as well as the best performing stock market in ASEAN.”

Anwar said Malaysia will now strive to refine “our expertise” in oil and gas, semiconductor manufacturing and Islamic finance to become a “global market leader” in all areas.

“In 2025,” he says added“we want to double our geographic centrality, as a conduit for electricity, talent and supply chain diversification.”

Malaysia not only has significant experience in oil and gas production dating back to the early decades of the twentieth century, but has also been a long-standing regional leader in electrical and electronic production, including semiconductors. Most of the semiconductor manufacturing takes place in the vast industrial parks around Penang, which were built in the 1970s, and in the nearby Kulim Hi-Tech Park, which used to be founded in the 1990s.

Despite some stagnation since the 1997-1998 Asian financial crisis, which reduced the manufacturing sector’s share of GDP reject From 31 percent in 1999 to 23 percent in 2010, Malaysia recorded an impressive number of significant foreign investments in artificial intelligence, cloud computing and chip manufacturing last year. In May, the American search giant launched Google announced that it would invest $2 billion to develop its first data center and Google Cloud region in Malaysia, in an industrial park in Selangor state. This was followed by the announcement in September that Malaysian tech company Dagang NeXchange Berhad and Google Cloud had signed a multi-year agreement to provide sovereign cloud services in the country.

In recent years, the country has also attracted billions in investments from the American chip maker Intel and the German company Infineonas well as investments from other leading Western and Chinese companies. Malaysia is now responsible for this 13 percent of global semiconductor testing and packaging, and is already the world’s sixth largest exporter of semiconductors, according to a report. report Last year in the New York Times. However, most of this involves the more rudimentary steps in the chip manufacturing process, such as assembly and testing.

That was one of the objectives of the Malaysian government’s National Semiconductor Strategy (NSS). revealed in May last year, it is pursuing more technologically advanced processes, such as design and advanced manufacturing. When announcing the NSS last year, Anwar said said that his government plans to establish at least 10 local companies dedicated to design and advanced packaging for semiconductor chips, and “push to the frontier” of the strategically crucial technology.

Under the NSS, Malaysia is targeting an additional $100 billion in foreign investment. It has also earmarked fiscal support worth at least US$5.3 billion to provide foreign investors with incentives including tax breaks, subsidies and visa waiver fees, and to train 60,000 Malaysian engineers to meet industry demand.

Much of the criticism of Malaysia is that it is a safe destination for investment in a region beset by geopolitical tensions. Last year, Anwar pitched Malaysia to foreign chipmakers as “the most neutral and non-aligned location for semiconductor manufacturing.” This is a message that he repeated yesterdaysaying that it is Malaysia’s “neutrality and openness to partnership that makes us a natural hub for all.” If the past year means anything, it seems that more and more foreign companies are finding this a compelling pitch.