Malaysia Looks to Expand Chip Design Expertise and AI Technology Capabilities

Malaysia is seeking to strengthen its position in the global semiconductor industry by expanding beyond manufacturing and outsourced semiconductor assembly and testing into integrated circuit (IC) design, advanced packaging and artificial intelligence (AI).

A strategic partnership with global computing platform company Arm Holdings, established in March 2026, is supporting efforts to build local expertise, develop skilled engineers and connect Malaysian businesses with international technology networks.

Arm Partnership Supports Local Chip Designers and Semiconductor Talent Development

The Malaysian Investment Development Authority has identified IC design, advanced packaging, innovation and talent development as priorities under the National Semiconductor Strategy.

Arm provides access to its technology platforms and programmes that help companies develop customised silicon, while also working with government agencies, universities and industry players on training initiatives. Its education efforts include quarterly programmes involving students, academics and industry participants, with an initial cohort drawing people from more than 40 universities and 80 companies.

As AI expands across cloud computing, connected devices and physical systems, Malaysia has an opportunity to develop locally designed chips and related technologies for emerging applications.

Access to global software ecosystems, technology partners and potential customers could help domestic firms overcome barriers to innovation and commercialisation. The longer-term challenge is to turn these capabilities into competitive Malaysian products while maintaining international collaboration and access to advanced computing technologies.