Malaysia is betting big on semiconductor design with a $250 million investment in Arm Holdings’ chip technology. The decade-long deal, signed on March 5, grants Malaysia access to seven of Arm’s compute subsystems and related intellectual property. This marks a major shift for the country, which has historically focused on chip assembly and packaging.
Key Points
- Malaysia will pay Arm $250M over 10 years for chip design access, aiming to produce its own semiconductors by 2030
- As part of the deal, Arm will train 10,000 Malaysian engineers and establish its first ASEAN office in the country
- The government sees the partnership creating up to 10 local chip companies with potential annual revenue of $20B
As part of the agreement, Arm will train 10,000 engineers in Malaysia, a move expected to accelerate the country’s plans to develop and manufacture its own AI chips. The partnership aligns with Malaysia’s goal to establish a robust chip design ecosystem, enabling local firms to compete in high-value semiconductor production rather than just assembling chips for global players.
Press statement on Malaysia’s landmark partnership with Arm Limited—the first of its kind in ASEAN.
— Kementerian Ekonomi - Laman Rasmi (@EkonomiMalaysia) March 5, 2025
This collaboration will drive Malaysia’s AI chip ambitions, talent development, and semiconductor innovation, with a projected ecosystem impact of RM133 billion ($30 billion).… pic.twitter.com/0mE4I5Q5xy
The deal also advances Malaysia’s Silicon Vision strategy, a national initiative to strengthen the local semiconductor sector. Economy Minister Rafizi Ramli emphasized that the move is about securing the country’s place in the global AI supply chain rather than reacting to geopolitical tensions between the U.S. and China. The government has set an ambitious goal of producing Malaysian-designed chips within the next five years, rather than the previously projected 10-year timeline.
The broader implications of this deal are significant. Malaysia, which already accounts for about 13% of the world’s chip assembly and testing, now aims to compete in semiconductor design—a domain long dominated by the U.S., Taiwan, and South Korea. The government expects the initiative to drive $30 billion in economic impact through innovation, job creation, and export growth.
Arm CEO Rene Haas, who was present for the signing, called the partnership a transformative step for Malaysia, highlighting the country’s decades-long role in semiconductor manufacturing. Arm’s decision to establish an office in Malaysia further underscores its commitment to the region.
Malaysia’s pivot comes at a time when nations worldwide are racing to secure domestic chip manufacturing amid supply chain disruptions and increasing demand for AI-powered hardware. Countries like the U.S., Japan, and China have already launched multi-billion-dollar semiconductor initiatives. Malaysia’s approach—leveraging Arm’s existing IP instead of building chip technology from scratch—could allow it to gain a competitive edge more quickly.
With semiconductor exports targeted to reach $270 billion by 2030, Malaysia is positioning itself as a rising player in the AI-driven chip industry. Whether this bold investment will pay off depends on how quickly the country can turn its new intellectual property into viable, market-ready products.