Malaysia eyes 7 percent global advanced packaging share by 2035

Malaysia is targeting a 7 percent share of the global advanced semiconductor packaging market by 2035, as the government accelerates efforts to move the industry up the value chain under its National Semiconductor Strategy (NSS). The Ministry of Science, Technology and Innovation (MOSTI) said in a statement on last Friday that the government has approved a MYR 92 million ($23.42 million) research and development (R&D) grant over 24 months to a consortium of five local companies. With an additional MYR 93.8 million ($23.88 million) in industry matching contributions, total investment amounts to MYR 185.8 million ($47.3 million). The consortium comprises SkyeChip Bhd, focused on HBM chip design and 2.5D/3D chiplet architecture; Inari Technology Sdn Bhd, developing pilot-scale advanced packaging capabilities; FusionAP Sdn Bhd, which is working on high-end intellectual property (IP) transfer; Pentamaster Instrumentation Sdn Bhd, developing automated test equipment and inspection systems; and NSW Automation Sdn Bhd, specializing in high-precision liquid dispensing technology. MOSTI’s Minister Chang Lih Kang said Malaysia is leveraging its 50-year semiconductor ecosystem and neutral geopolitical position to position itself as a preferred hub for supply chain resilience, particularly as the global semiconductor industry is projected to reach $1 trillion by 2030. He said the country is shifting from traditional assembly, testing and packaging (ATP) activities towards higher-value design and advanced packaging, which offers significantly higher margins of 40 percent to 50 percent, driven by demand from artificial intelligence (AI) and high-performance computing. under the 13th Malaysia Plan (RMK13), the government is focusing on high-growth, high-value (HGHV) industries, including semiconductors, through strengthening R&D, automation and local talent development. According to Economy Minister Akmal Nasrullah Mohd Nasir, under the 13th Malaysia Plan (RMK13), the government is prioritizing high-growth, high-value industries, with semiconductors identified as a key pillar supported by stronger R&D, automation and talent development. It is noted that Malaysia is currently the world’s sixth-largest semiconductor exporter, accounting for about 13 percent of global ATP activities, but is now accelerating its move into advanced packaging to avoid the “low-margin trap” amid regional cost competition. The initiative also aims to develop local talent, strengthen industry-academia collaboration and create high-skilled jobs as part of Malaysia’s long-term semiconductor strategy. Malaysia must build its own digital capabilities to ensure economic resilience, says Digital Minister