Malaysia, the world’s sixth-largest chip exporter, has achieved this status primarily by concentrating chip packaging and testing facilities on its territory. The country’s authorities want to develop silicon wafer processing on its territory, and the British holding Arm has volunteered to help them with this.
Image source: GlobalFoundries
According to the terms of the agreement signed with Arm, cited by Bloomberg, the Malaysian authorities undertake to pay the processor architecture developer $250 million over ten years for access to its technologies and licenses. The country’s authorities intend to establish the development of semiconductor components in Malaysia with the support of Arm. This activity will be carried out by private companies in Malaysia. By 2030, the country expects to increase the export of semiconductor products to $270 billion per year. Products from Intel, AMD, GlobalFoundries and Infineon Technologies are already being packaged in Malaysia.
According to Malaysian Economy Minister Rafizi Ramli, the country’s authorities are determined to form a complete ecosystem on its territory, from chip development to silicon wafer processing and subsequent packaging. The last phase is already well developed in Malaysia, and the work remains for the previous two. The official noted that with Arm’s support, the country plans to grow at least 10 chip developers who together could produce $20 billion worth of products annually. This agreement with Arm will increase Malaysia’s GDP by one percentage point, as the authorities expect. Electronics and electrical equipment exports already account for 40% of Malaysia’s foreign trade flows.
Local companies will be able to start producing chips of their own design in five or seven years, according to the Malaysian Minister of Economy. Previously, the upper limit of the range was ten years, but the agreement with Arm will allow it to be lowered, since it is easier to use ready-made designs than to develop your own.
Malaysia is the third-largest supplier of semiconductor products to the United States, and the tariffs raised by Trump could seriously affect the economy of the former country. Other factors are already having a negative impact on the growth of the Malaysian economy, so the country’s authorities are trying to find new incentives for its development.