Malaysia’s ASEAN Chairmanship Supercharges NSS in Global Chip Race

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 3 September 2025 - Malaysia's semiconductor ambitions are moving in step with its role as ASEAN chair, with investment momentum signalling a larger regional shift in the global chip supply chain.

In the first half of 2025, the country secured RM190.3 billion (USD45.2 billion) in approved investments, an 18.7 per cent increase over the same period last year.

Singapore was the largest foreign investor with RM43.4 billion (USD10.3 billion), reflecting strong cross-border confidence in Malaysia's trajectory.

Over 89,000 new jobs to be created through projects spanning manufacturing, services and the primary sector. The electrical and electronics (E&E) industry stood out with RM13.1 billion in new commitments, highlighting Malaysia's push to evolve beyond its traditional role in assembly and testing. The National Semiconductor Strategy (NSS), launched in 2024, has already attracted RM54.2 billion in its first year, marking a strong start towards the government's RM500 billion target by 2030.

"What investors are responding to is Malaysia's ability to deliver. In semiconductors, that means proven ecosystems in Penang and Johor, strong links with Singapore, and a pipeline of trained engineers ready to take on higher-value roles. The NSS gives us a clear direction, but credibility comes from how quickly projects move from approval to operation. On that front, Malaysia is building real trust," said Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, Chief Executive Officer of the Malaysian Investment Development Authority (MIDA).

Moving Upstream

In March 2025, Malaysia signed an agreement with Arm Holdings Plc to gain access to the UK-based firm's design library – aiming to produce its own chips within the next decade.

Malaysia currently controls seven per cent of the global semiconductor market, with six out of the 12 largest semiconductor companies globally operating in the country.

This share is expected to increase as semiconductor players worldwide turn to Southeast Asia for a stable microchip supply chain, as the US-China trade war escalates.

A Turning Point for Local SMEs

At home, small-medium enterprises (SMEs) such as CG Global Profastex hail the NSS as "a turning point" in moving beyond traditional manufacturing into higher-value activities like advanced test development, product design enablement, and process automation.

Operating out of Penang for almost a decade now, CG Global serves both front-end and back-end semiconductor-related customers – particularly in equipment, test, and automation subsystems – in Malaysia and selected ASEAN markets.

"Traditionally, EMS SMEs operated in transactional roles—limited to basic assembly or support functions. Today, under the NSS framework, we have been actively encouraged to move up the value chain.

"It pushes us to upgrade our infrastructure, adopt advanced technologies, and build the capabilities needed to support complex, precision-driven industries," said CG Global managing director Siti Padillah Binti Abdul Wahab.

Siti Padillah said the company plans to apply for NSS-aligned funding to scale up production capacities and adopt digital tools in order to strengthen Malaysia's position within ASEAN semiconductor landscape.

"With the NSS as our guide, we are investing in the future—so Malaysia can lead not only in volume, but in value," she added.

If anything, CG Global reflects the confidence boost that hundreds of homegrown enterprises have received from the NSS to pursue larger ambitions and greater appetite for growth.

Going Global as a Region

In 2024, the ASEAN semiconductor market was valued at US$95.91 billion, making up 15 per cent of the global semiconductor market that reached a record high of US$627.6 billion.

The region's market share is set to soar in the coming months, thanks to the newly-launched Johor-Singapore Special Economic Zone (JS-SEZ), which combines Singapore's upstream excellence and Malaysia's Outsourced Semiconductor Assembly and Test (OSAT) strength.

Johor emerged as Malaysia's top state for approved investments in the first half of 2025, recording RM56 billion (USD13.3 billion). Among the early movers was Japan's Ferrotec Group, a leading supplier of materials, components and equipment for the global chip industry. The company commenced operations at its new facility in Johor in April 2025, supporting both regional and international customers.

"The JS-SEZ offers efficient cross-border logistics and connectivity with Singapore, which is critical for our operations," said Soo Kim Fatt, director of Ferrotec Power Semiconductor Malaysia. "Its proximity to Singapore provides excellent transport accessibility, making it easier for international customers, partners, and overseas colleagues to visit Johor Bahru for meetings, technical support, and collaboration."

"The JS-SEZ is more than just proximity. It gives investors access to Singapore's design and R&D right next to Malaysia's manufacturing and assembly," said Sikh Shamsul Ibrahim. "Together with the NSS, it strengthens ASEAN's position as a credible alternative in the global semiconductor supply chain."

Johor's role is also expected to strengthen further by significant technological advancements from a partnership between YTL Power International and Nvidia, focused on Artificial Intelligence (AI). Located at the YTL Green Data Centre in Kulai, this landmark project adds a critical digital infrastructure layer to the state's technology ecosystem, positioning Malaysia as a leading AI hub in the region.

Tapping the Talent Pool

Beyond infrastructure and investments, Malaysia is also actively positioning itself as a regional talent magnet and a training hub for semiconductor expertise.

As of mid-2025, Malaysia has trained over 13,000 high-skilled semiconductor talents – more than one-fifth of the 60,000 target outlined in the NSS.

The government sees this as part of a regional effort. During the one-year anniversary of the NSS, Prime Minister Datuk Seri Anwar Ibrahim said Malaysia's training and upskilling initiatives are part of a "broader, regional, ASEAN-wide push", pointing to deep STEM pipelines in Vietnam, the Philippines and Indonesia. Under Malaysia's chairmanship, initiatives such as the ASEAN Framework for Integrated Semiconductor Supply Chains (AFISS) are promoting cross-border training and collaboration.

MIDA is working with investors to align training and academic programmes with industry needs. "Talent is the decisive factor for the next phase of growth. Our priority is to make Malaysia both talent-rich and talent-ready, while attracting the best from around the region," said Sikh Shamsul Ibrahim.

The Test Ahead

The NSS has given Malaysia a running start, drawing global names, lifting SMEs and tying national ambition to ASEAN's broader potential. Its early success lies not only in billions invested but in the alignment, it has fostered between government, industry and regional partners.



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https://www.mida.gov.my/

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