Semiconductor group seeks tenfold boost to automation tax breaks

The semiconductor industry association has launched a push for significantly enhanced tax incentives aimed at bolstering the sector's competitiveness and innovation capacity. The group is seeking to increase the automation capital allowance from RM10 million to RM100 million, representing a tenfold increase in the current provision. Additionally, the association is advocating for a 200% tax deduction on research and development expenditure to encourage innovation and technology advancement within the industry. These proposals reflect the sector's efforts to attract investment and strengthen Malaysia's position in the global semiconductor supply chain. The requests come amid intense global competition for semiconductor manufacturing and talent, with countries across the region offering increasingly attractive incentives to secure industry investment. Tax incentives are considered crucial tools for supporting capital-intensive industries such as semiconductors, which require substantial upfront investment in equipment and research capabilities.