Malaysia Becomes the Focus of Global Semiconductor Sector Competition, the US-China Chip Issue is Hotter!


Malaysia emerged as a champion in the semiconductor industry as US-China tensions prompted local companies to expand their production operations.

According to Kendrick Chan, Head of the Digital International Relations Project at LSE IDEAS said Malaysia has a solid infrastructure with around five decades of experience in behind the scenes processing of semiconductor manufacturing especially in assembly.

Semiconductors or chips are delicate components found in smartphones and vehicles such as cars. The technology industry for these two is a great competition for two giant countries, the United States and China.

In December 2021, US giant Intel will invest more than $7 billion to build a packaging and chip testing factory in Malaysia that is expected to start operating in 2024.

Based on Intel Malaysia's statement, their decision to invest in Malaysia is to gather talent in the grassroots of a diverse community, develop infrastructure and a robust supply chain.

Intel's first overseas production facility was an assembly site in Penang launched in 1972 with an investment of $1.6 million. The company continues to add a full test facility as well as a development and design center in Malaysia.

Currently, Malaysia holds 13% of the global market in chip packaging and testing services.

In a report last February 18, exports of semiconductor devices and integrated circuits increased 0.03% to RM387.45 billion in 2023 amid weakness in global chip demand.

In an effort to develop the country's semiconductor ecosystem and attract investors, Malaysia established a national semiconductor strategic team last January.