IC Design Potential Growth Sector

Creating its own semiconductor ecosystem is crucial for Malaysia to move up the value chain and be able to source local semiconductor chips to data centres, says Economy Minister Rafizi Ramli.

He highlighted that instead of relying on imported chips, Malaysia has to focus on developing its own semiconductor design capabilities.

With that in mind, Rafizi stated that the federal government’s strategic direction is to now enhance the entire semiconductor ecosystem, covering both upstream and downstream sectors with a particular emphasis on original design manufacturers (ODM).

“The interest in data centres will continuously drive the demand for semiconductors and this presents opportunities because there is demand for chips.

“As this ecosystem takes place, data centres in Malaysia will begin to consider ‘Made by Malaysia’ chips. That is the consideration the federal government is looking for,” he said at the launch of the Malaysia Semiconductor Integrated Circuit (IC) Design Park in Puchong yesterday.

Rafizi stated that the federal government hopes to see a significant growth in the number of local IC design companies in Malaysia within the next five years. This aligns with the Selangor state’s goal to launch new IC Design Parks every year until 2028.

“We have a long way to go before we can reach the kind of magnitude that we require to make our electrical and electronics industry as vibrant as the government plans it to be.

“But once we do have enough IC design companies, then private equity and venture capitals will come in and provide funds as well as connections to different parts of the semiconductor ecosystem, which will lead ODMs to start considering (to be a part of our ecosystem),” he said.

Rafizi then urged financial institutions, venture capitalists and private equity firms to begin looking into IC design as a potential growth sector and consider including it into their risk profile to determine how capital can be deployed into the IC design industry.

“As much as getting the players and infrastructure for IC design, our focus is to also get the capital model right and get the capital deployment strategies in place – so that we can see more Malaysians and international engineers coming here to drive towards this goal,” he added.

Present during the event, Selangor Mentri Besar Datuk Seri Amirudin Shari said Selangor does not aim to be a bit-part player within the semiconductor space, but instead intends to see the semiconductor chips of the future with the labels “Made in Malaysia, designed in Selangor”.

“This is our rallying call and this is crucial if we want to make Selangor Malaysia’s first RM500bil economy in the coming three years,” he said.

The Malaysia Semiconductor IC Design Park aims to position Malaysia as a potential powerhouse in the global IC design industry.

This strategic initiative is designed to leverage the country’s technological capabilities and resources, fostering innovation and advancing its reputation in high-tech manufacturing and design.

The park can house more than 400 IC design engineers from five local, international and joint-venture IC design firms.