Malaysia Semiconductor Market Size and Forecast by Product Type, Node Type, Application, and Distribution Channel: 2019-2032

Malaysia Semiconductor Market Growth and Performance

• The Malaysia semiconductor market size in 2023, stood at US$ 3.02 Billion.
• Furthermore, projections indicate that the semiconductor market in Malaysia is poised for sustained growth, with an anticipated annual growth rate of 10.1% from 2024 to 2032, as denoted by the Compound Annual Growth Rate (CAGR).

Malaysia Semiconductor Market Outlook

The Malaysia semiconductor market is gaining momentum as the country rolls out its ambitious National Semiconductor Strategy (NSS) with a vision to become a global powerhouse in semiconductor manufacturing and innovation. Backed by RM25 billion (US$5.3 billion) in fiscal support and targeted incentives, Malaysia aims to transform its semiconductor industry over the next decade, positioning itself as a major player in the global semiconductor supply chain.

The outlook for the Malaysia semiconductor market is highly optimistic. The NSS is structured into three phases: building on Malaysia’s existing strengths, moving to the frontier of advanced semiconductor technologies, and innovating to establish world-class Malaysian firms in semiconductor design and manufacturing. With the government’s goal to double Malaysia’s global market share of the semiconductor trade from 7% to 14% by 2029, the market is well-positioned for significant growth. The strategy’s emphasis on training and upskilling 60,000 Malaysian engineers over the next decade, alongside targeted incentives such as tax breaks and subsidies, will help build a highly skilled workforce and enhance Malaysia’s competitive advantage in the global market.

Malaysia Semiconductor Market Growth

The Malaysia semiconductor market is experiencing robust growth, driven by strategic investments, government support, and rising global demand for advanced semiconductor technologies. The NSS targets RM500 billion (US$107 billion) in investments, focusing on expanding chip design, advanced packaging, and manufacturing equipment for semiconductor chips. Malaysia currently accounts for 13% of global semiconductor testing and packaging, showcasing its critical role in back-end operations and supply chain resilience.

Key investments include ASE Technology’s new plant in Penang, expanding its operations from 1 million to 3.4 million square feet, and the development of the largest integrated circuit (IC) design park in Southeast Asia in Puchong, which aims to employ up to 300 chip-design engineers. The country’s strategic initiatives are expected to attract major global companies such as Apple, Huawei, Lenovo, Intel, and Infineon.

Malaysia Semiconductor Market Trends

Key trends shaping the Malaysia semiconductor market include:

• Strategic Investments: The NSS aims to secure RM500 billion in investments and establish 10 Malaysian companies in design and advanced packaging with revenues between RM1 billion and RM4.7 billion.
• Modernizing OSAT Services: Malaysia is leveraging its strength in outsourced semiconductor assembly and test (OSAT) services by modernizing advanced packaging and focusing on power semiconductors essential for electric vehicles (EVs) and artificial intelligence (AI).
• Front-End Design Focus: The IC design park in Puchong is a significant development, propelling Malaysia into high-value, front-end semiconductor design and enhancing its position in the global market.
• Global Collaboration: Malaysia's neutral stance in the US-China tech war allows it to serve both markets, making it an attractive destination for semiconductor investments.

Malaysia Semiconductor Market Competitive Landscape

The competitive landscape of the Malaysia semiconductor market is marked by the presence of both global semiconductor giants and emerging local players. The country has attracted major companies like Intel, Infineon, ASE Technology, and Phison Electronics. The government's support through the NSS and initiatives by the Selangor Information Technology & Digital Economy Corporation (Sidec) are creating a conducive environment for local firms to thrive alongside international companies. The proposed incentives, including tax breaks, visa exemptions, and subsidies, enhance Malaysia’s attractiveness to investors and contribute to a dynamic and competitive semiconductor industry.

Malaysia Semiconductor Industry Development

The Malaysia semiconductor industry is advancing through strategic public and private sector collaborations, infrastructure development, and workforce training. The NSS is a cornerstone of this development, focusing on building a resilient semiconductor ecosystem that spans from back-end operations to advanced chip design and manufacturing. The government's plan to develop Malaysia as a global R&D hub for semiconductors, supported by world-class universities and corporate R&D centers, will drive innovation and ensure long-term industry sustainability. The expansion of manufacturing facilities, such as ASE’s advanced packaging and testing plant in Penang, reinforces Malaysia’s role as a critical link in the global semiconductor supply chain.

Malaysia Semiconductor Market Scope