Malaysia must accelerate its transition from being primarily a semiconductor manufacturing hub to becoming a nation that develops its own technology, intellectual property (IP) and products in order to retain more economic value within the country, Economy Minister Akmal Nasrullah Mohd Nasir said.
Speaking at the The Edge-HSBC E&E Symposium 2026, Akmal said the future success of Malaysia’s semiconductor industry should no longer be measured solely by manufacturing capacity or the volume of foreign investments it attracts.
Instead, he said the country’s competitiveness will depend on its ability to innovate, commercialise new technologies and build globally competitive Malaysian technology companies.
“For more than 50 years, Malaysia has proven its ability to participate successfully in the semiconductor industry through assembly, testing, packaging and precision manufacturing,” he said.
“The question today is no longer whether Malaysia can be part of the industry. The real challenge is whether we can capture more value and ensure that value remains with our companies, talent and technological capabilities.”
Akmal said Malaysia must shift from contract manufacturing towards developing its own products and technologies, describing the country’s next stage of growth as moving from ‘Made in Malaysia’ to ‘Made by Malaysia’.
He noted that rapid advances in artificial intelligence (AI), advanced computing, data centres and digital services are creating new opportunities for Malaysia to move further up the global semiconductor value chain.
As the world’s sixth-largest semiconductor exporter, contributing around 13 per cent of global assembly, testing and packaging activities, Malaysia already has a strong foundation to expand into higher-value segments of the industry.
However, Akmal warned that multinational companies now evaluate investment destinations based on more than labour costs. Increasingly, they are looking at factors such as energy security, water supply, logistics efficiency, policy certainty, talent availability and the government’s ability to resolve issues quickly.
“Malaysia must compete not just as a manufacturing location, but as a technology and innovation partner,” he said.
To achieve that, he said the country must strengthen capabilities in advanced packaging, integrated circuit (IC) design, semiconductor equipment, materials, automation and Malaysian-owned intellectual property.
Akmal added that future technological leadership will be determined not by the number of factories a country owns, but by its ability to generate new knowledge, commercialise innovation and retain greater economic value domestically.
He said targets outlined under the 13th Malaysia Plan (13MP), the New Industrial Master Plan 2030 (NIMP 2030) and the National Semiconductor Strategy must translate into measurable outcomes, including more commercialised products, new patents, high-skilled jobs and stronger local technology companies.
Akmal also highlighted Malaysia’s strategic collaboration with Arm Holdings as an important catalyst for developing the country’s chip design, AI and IP capabilities.
He revealed that six Arm technology licences have already been offered to four Malaysian companies, while 1,530 participants had completed training under the initiative as of 3 July.
“Access to technology is only the beginning. Real success comes when it produces prototypes, commercialised innovations, high-skilled jobs, stronger industry collaboration and more intellectual property owned by Malaysian companies,” he said.
Akmal stressed that Malaysia’s ability to climb the semiconductor value chain will ultimately depend on effective collaboration between the government, industry, financial institutions, universities and local companies.
“If we succeed, Malaysia will not only remain a key player in the global semiconductor supply chain but also become a nation that creates technology, improves productivity, offers higher-paying jobs and delivers more sustainable prosperity for its people,” he added.
