Malaysia Semiconductors

Malaysia’s National Semiconductor Strategy (NSS) presents significant opportunities for U.S. companies across the semiconductor value chain. The NSS aims to move Malaysia up the value chain from assembly, testing, and packaging into higher-value activities such as chip design, advanced packaging, wafer fabrication, and AI-enabled manufacturing. This creates opportunities across the semiconductor value chain for U.S. companies, especially in supplying chip design tools, AI computing infrastructure, advanced manufacturing equipment, and industrial software.  It also offers opportunities to participate in chip design collaborations, R&D partnerships, and workforce development initiatives.

For over 50 years, Malaysia’s semiconductor industry has been a pillar of the economy, contributing around 25% of GDP through the broader electrical and electronics (E&E) sector.  Malaysia has become and remains a critical node in global semiconductor supply chains. Building on this foundation, the government launched the NSS in 2024, which is now in implementation and has been further strengthened through 2025–2026 policies, incentives, and budget support.

The long-term ambition is to position Malaysia as a regional semiconductor design and innovation hub. The strategy is supported by an estimated $5.3 billion in fiscal incentives covering talent development, R&D, digitalization, and ecosystem upgrades to accelerate industry transformation and adaptation to an increasingly digital world.

Malaysia is also offering semiconductor-related procurement opportunities through NSS-driven programs and AI, cloud, and manufacturing tenders.  These planned and ongoing tenders will create additional demand for US firms in chips, design tools, and infrastructure across the ecosystem.

To learn about opportunities in this sector and the procurement opportunities, contact Commercial Specialist Kisok Kumar at office.kualalumpur@trade.gov.