Malaysia Plans Incentives to Boost Semiconductor Sector

Malaysia's Ministry of Investment, Trade and Industry (Miti), led by Minister Tengku Datuk Seri Zafrul Abdul Aziz, is preparing to announce targeted incentives in July to further stimulate growth in the local semiconductor sector, coinciding with the first anniversary of the National Semiconductor Strategy. The ministry has been engaging with industry players to identify needs, emphasizing the demand for increased fiscal support and a supportive policy framework to strengthen the ecosystem. Despite geopolitical uncertainties, Malaysia remains committed to global collaboration to maintain its role in the semiconductor supply chain, while respecting nations' rights to develop domestic industries. The country has a longstanding history in the semiconductor industry since the 1970s, contributing roughly US$130 billion to national electronics exports last year and accounting for 13% of global back-end semiconductor output. Additionally, Malaysia is diversifying its markets through ratification of 17 free trade agreements to sustain and expand its semiconductor industry. These efforts were highlighted during Miti's keynote at the SEMICON Southeast Asia 2025 event and subsequent discussions with industry leaders.