Business · Malaysia Bureau
Tengku Zafrul pushes local chipmakers to climb value chain
Malaysia's finance minister has urged domestic semiconductor firms to leverage Budget 2027 allocations to advance into higher-value manufacturing segments. The push comes as the government seeks to strengthen the nation's position in the competitive global chipmaking industry.
LSN Malaysia ·
KUALA LUMPUR — Finance Minister Tengku Zafrul Aziz has called on local semiconductor companies to capitalise on Budget 2027 investments by moving towards more sophisticated and profitable areas of chip production.
The minister's remarks underscore the government's strategy to upgrade Malaysia's semiconductor sector beyond traditional assembly and testing operations. By shifting towards high-value activities such as chip design, advanced packaging, and specialised manufacturing, domestic firms can command better margins and reduce dependence on labour-intensive processes.
Tengku Zafrul emphasised that Budget 2027's dedicated allocations should serve as a catalyst for industry transformation rather than merely sustaining existing operations. He noted that Malaysian semiconductor firms possess the technical capacity and market access to compete in premium segments, provided they make strategic investments in research, development, and workforce capabilities.
The semiconductor industry remains a cornerstone of Malaysia's manufacturing sector, contributing significantly to exports and employment. Industry analysts have noted that regional competitors have increasingly moved up the value chain, prompting Malaysian stakeholders to accelerate similar transitions to maintain competitiveness in the evolving global market.
Government support measures within Budget 2027 are expected to include incentives for research partnerships, talent development programmes, and infrastructure upgrades to facilitate the sector's technological advancement.