On April 22nd, the Malaysian government unveiled the KL20 Action Paper. This initiative aims to foster a vibrant entrepreneurial ecosystem in Malaysia. Consequently, the government plans to build the largest integrated circuit (IC) design park in Southeast Asia. Located within Malaysia, the park will benefit from tax breaks, subsidies, free work visas, and other incentives. These efforts support this ambitious initiative.

Malaysia’s Semiconductor Landscape:

Malaysia plays an important role in the packaging and testing end of the global semiconductor industry chain. According to previous statistics provided by the Malaysian Ministry of International Trade (MITI), the Malaysian semiconductor industry accounts for 7% of the total global trade, 13% in the packaging and testing field.

Ambitious Digital Industry Center in Malaysia:

Reports indicate that the Malaysian government aims to transform Malaysia into Southeast Asia’s digital industry center. Specifically, the goal is to rank among the top 20 in the “Global startup ecosystem index” by 2030. Simultaneously, the government has signed 25 investment letters of intent. These involve a total of 4.8 billion RM (approximately 7.283 billion CNY). Among these, three foundations, including Malaysia’s sovereign wealth fund Khazanah Nasional Berhad and Lanxin Venture Partners, will invest 3 billion RM. This investment aims to develop a robust Malaysian entrepreneurial ecosystem.

Malaysia’s Industrial Advancement in the Semiconductor Sector:

Malaysia is currently stepping up its pace of industrial upgrading. It has previously formulated an ambitious industrial upgrading plan aimed to developing from the back-end of the global US$520 billion semiconductor industry chain to the front-end and providing higher value-added activities such as wafer manufacturing and integrated circuit design. In January this year, Malaysia established a National Semiconductor Strategy Task Force to promote the development of the entire semiconductor ecosystem and attract more investment in the front-end process. In April, a new policy was promulgated to focus on IC designs. Industry insiders claim that Malaysia still has a long way to go in the future. With the help of this wave of the AI era, Malaysia is expected to become another important manufacturing center for the global semiconductor industry.

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