Budget 2027: Semiconductor Initiatives To Help Malaysia Move Up Value Chain

By Fatin Umairah Abdul Hamid

KUALA LUMPUR, Oct 9 (Bernama) -- Semiconductor-related initiatives under Budget 2027 could help Malaysia move up the global semiconductor value chain by strengthening innovation, intellectual property (IP) creation and the development of high-value technologies, said the Malaysia Semiconductor Industry Association (MSIA).

The initiatives are also in line with the National Semiconductor Strategy (NSS), which aims to move Malaysia beyond back-end activities such as assembly and testing towards higher-value front-end segments, including integrated circuit (IC) design and wafer fabrication.

MSIA president Datuk Seri Wong Siew Hai said the measures would support the commercialisation of innovations in areas such as IC design and advanced packaging, enabling Malaysian companies to build stronger technological capabilities.

“These ambitions must be supported by the right talent. The government should introduce policies to attract the world's best talent to strengthen innovation, IP design and development, and accelerate technology transfer and capability building in Malaysia,” he told Bernama.

Meanwhile, Kearney Malaysia country head Keat Yap said support for IC design companies should extend to capital-intensive stages of development, including prototype fabrication, testing, silicon validation and customer qualification.

“Funding should also be connected to actual industry demand, with potential customers involved early enough to guide development priorities,” he said.

On the proposed enhancement to the global services hub incentive, Yap said allowing extensions in five-year periods, up to a maximum of 30 years, could provide greater long-term certainty for multinational companies establishing regional operations in Malaysia.

He said the wider economic benefits should also be assessed based on the ecosystem developed around these hubs, as their presence could generate demand for Malaysian suppliers and specialised service providers.

Earlier, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim tabled Budget 2027, amounting to RM459.8 billion, comprising RM376.8 billion in federal operating expenditure and RM83 billion in federal development expenditure.

Among the semiconductor-related measures announced were initiatives to attract global semiconductor investments to the Kulim Hi-Tech Park and the establishment of a RM100 million Strategic Investment Fund by Khazanah Nasional Bhd and InvestPenang.

-- BERNAMA