The Ministry of Investment, Trade and Industry (MITI) will announce new incentives for Malaysia’s semiconductor industry in July 2025.

This announcement will mark the first anniversary of the National Semiconductor Strategy (NSS).

MITI is working closely with industry players to create fiscal support and policy frameworks that meet their needs.

Minister Tengku Datuk Seri Zafrul Abdul Aziz emphasized Malaysia’s dedication to global partnerships to sustain its semiconductor supply chain role.

Malaysia’s semiconductor industry dates back to the 1970s and contributed around US$130 billion in electronics exports in 2024, making up 13% of the world’s back-end semiconductor output.

🔗 Source: Bernama

🧠 Food for thought

1️⃣ Malaysia’s strategic position amid semiconductor industry’s geopolitical reshaping

Malaysia’s call for global collaboration comes at a critical time when the industry is being reshaped by geopolitical forces affecting supply chains.

While the US and China engage in technological competition with export controls and investment restrictions, Malaysia’s 13% global share of back-end semiconductor output positions it as a significant neutral player in the increasingly fragmented global supply chain 1.

This positioning aligns with broader industry trends, as 92% of semiconductor executives have identified geopolitical tensions as a primary challenge despite overall industry optimism for 2025 2.

Malaysia’s approach reflects a pragmatic response to the global push for semiconductor self-sufficiency that has emerged following pandemic-related supply disruptions, with countries worldwide investing billions to protect their supply chains 1.

The upcoming incentive announcements mark Malaysia’s deliberate strategy to strengthen its semiconductor ecosystem while maintaining international partnerships, balancing national interests with the industry’s inherently global nature.

2️⃣ AI-driven growth creates strategic opportunity for Malaysia’s semiconductor sector

Malaysia’s development of semiconductor incentives comes as artificial intelligence has become a significant driver of semiconductor revenue growth, surpassing automotive applications 2.