Malaysia wants its own 'Made by Malaysia' tech IP, not just assembly lines

Malaysia is stepping up efforts to build homegrown semiconductor intellectual property (IP), with the government identifying more than six local integrated circuit (IC) design firms as part of a broader push to shift the industry up the value chain.

As the country moves from being an assembly hub to an owner of technology IP, the shift could also open new doors beyond engineering and manufacturing. For marketers and communications professionals, the emergence of local chip champions begs a bigger question: will Malaysia’s push for “Made by Malaysia” tech also create new opportunities to build brands in the semiconductor space?

In a written reply in the Dewan Negara, the Ministry of Investment, Trade and Industry (MITI) said the move forms part of the country’s National Semiconductor Strategy (NSS), which aims to transition Malaysia from primarily providing outsourced semiconductor assembly and testing (OSAT) services to becoming an owner of technology IP under the “Made by Malaysia” vision.

According to MITI, the government has also identified 13 local companies that could potentially be developed into industry leaders under the “10+100 Local Champions” target. The programme aims to cultivate 10 companies generating more than US$1 billion in annual revenue and 100 companies with at least RM1 billion in revenue.

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To support the development of domestic innovation capabilities, the government is also backing startups through initiatives such as MyChipStart and SemiconStart, which focus on strengthening local chip design capabilities. In parallel, mechanisms are being drafted to match local IP owners with industry players and investors to accelerate the commercialisation of research and development and drive the creation of high-impact IP.

The ministry noted that the semiconductor sector remains a major contributor to Malaysia’s manufacturing investment. However, while foreign direct investment (FDI) has traditionally dominated the sector, local participation in the value chain has been gradually increasing.

Since the launch of the NSS in May 2024, semiconductor investments have recorded strong growth, with FDI totalling RM56.8 billion while domestic investment (DI) reached RM3.5 billion. The reliance on foreign investment highlights the need to strengthen domestic investment to build resilience in the local semiconductor ecosystem.

To support this goal, the government has allocated nearly RM2 billion in financing support for the semiconductor sector in 2026. The funds will be channelled through targeted grant schemes designed to ensure more focused and high-impact use of financial resources.

Beyond financing, the government is also encouraging companies receiving incentives to contribute to talent development by offering industrial internships and implementing upskilling and reskilling programmes for local workers. The move is intended to strengthen Malaysia’s semiconductor talent pipeline and reduce dependence on foreign labour in highly skilled roles.

Companies involved in semiconductor production may also qualify for incentives under the Promotion of Investments Act 1986 or the upcoming New Incentive Framework for the manufacturing sector, which is expected to open for applications in the first quarter of 2026.

At the regional level, Malaysia is also pushing for deeper semiconductor cooperation through the ASEAN Federated Integrated Semiconductor Supply Chain (AFISS) framework. The initiative aims to position ASEAN as a global hub for semiconductor innovation and design rather than solely an assembly base. 

Malaysia’s broader push to move from “Made in Malaysia” to “Made by Malaysia” has also been echoed across government leadership. During the launch of Malaysia Brand Day 2026 earlier in January this year, Steven Sim Chee Keong, minister of entrepreneur development and cooperatives, called on businesses to focus on building homegrown brands, intellectual property and innovation rather than relying solely on cost-competitive manufacturing.

Sim noted that while Malaysia’s long-standing role as a manufacturing hub has driven economic growth for decades, the country must now shift towards becoming a value creator in the global economy. By strengthening local capabilities, encouraging entrepreneurship and supporting SMEs to scale globally, the government hopes to cultivate more Malaysian brands and technologies that can compete internationally.

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