Anwar: RM1.1b partnership with UK’s Arm Holdings marks beginning of Malaysia’s second semiconductor wave - Relevant News

Anwar: RM1.1b partnership with UK’s Arm Holdings marks beginning of Malaysia’s second semiconductor wave

(From left) Mida CEO Datuk Sikh Shamsul Ibrahim, Chief Secretary to the Government Tan Sri Datuk Seri Shamsul Azri Abu Bakar, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, Minister of Economy Datuk Seri Rafizi Ramli, Prime Minister Datuk Seri Anwar Ibrahim, ARM Holdings plc CEO Rene Haas, Arm Holdings chief commercial officer Will Abbey, Economy Ministry secretary general Datuk Nor Azmie Diron, and Arm Holdings president for Asean and Taiwan CK Tseng, at Malaysia's Silicon Vision launch ceremony on Wednesday. (Photos by Patrick Goh/The Edge)

KUALA LUMPUR, 5 MARCH 2025: The Malaysian government's US$250 million (RM1.11 billion) partnership with leading semiconductor design firm Arm Holdings plc will usher in Malaysia’s second semiconductor wave, said Prime Minister Datuk Seri Anwar Ibrahim.

Following decades of being an established back-end player in chip testing and assembly, Anwar said Malaysia eyes a leap to the front-end of the supply chain by developing its own chip designing capabilities with the help of SoftBank Group Corp-owned Arm.

“Malaysia’s collaboration with Arm represents the start of the second semiconductor wave. This marks a fundamental shift in our approach to semiconductors and technology that will define our future,” Anwar said in his keynote address at Malaysia's Silicon Vision launch ceremony on Wednesday.

“Through this comprehensive partnership with Arm, we have conceived one of the most ambitious technological plans Malaysia has ever seen to pioneer ‘made by Malaysia’ AI (artificial intelligence) chips. These chips will be designed, manufactured, tested and assembled here, and sold to the rest of the world,” he added.

The logos of the Malaysian government (left) and Arm Holdings plc (right) seen displayed at the event on Wednesday,

Under the deal, Arm will provide Malaysia with intellectual property (IP) licences and compute subsystems (CSS) for RM1.11 billion, to be paid over ten years. In addition, Arm will collect royalties on chips sold. Details of the royalty were not disclosed.

Anwar said the partnership comprises three key features, which are the establishment of a comprehensive training programme to develop 10,000 integrated circuit (IC) design engineers, providing selected Malaysian companies with privileged access to Arm’s cutting-edge technology and IP portfolio, and facilitating the development of locally designed semiconductor products.

The prime minister noted that Arm will also establish its first office in Asean in Kuala Lumpur.

PM Datuk Seri Anwar Ibrahim: Malaysia’s collaboration with Arm represents the start of the second semiconductor wave.

Building on Malaysia’s decades-long semiconductor experience with Arm’s expertise

Speaking on why Malaysia was selected as Arm’s partner, the UK-firm’s chief executive officer Rene Haas highlighted Malaysia’s decades-long experience in the semiconductor industry.

He noted that with Arm’s expertise in the chip design space, Malaysia can leverage the firm’s expertise to develop the country’s own chip design ecosystem.

Arm Holdings plc CEO Rene Haas: The future of AI is going to run on Arm, and it (the future of AI) is going to run here (Malaysia).

“We are in an age of innovation with the advent of AI, which makes this partnership and this timing so perfect because Arm’s computing hardware is going to be needed in all [of] these devices," he said.

Haas underlined that AI-powered chips will not only be used in data centres for large language models, but are required for every device that requires the use of AI.

“We have the world's largest software developer system of over 20 million developers, and it's growing. This ecosystem that we have, perfectly places us to partner with the government of Malaysia,” he said.

According to Haas, Arm-designed chips are nearly all-present in the modern world. He noted that the company has shipped over 300 billion chips since its founding in 1995 and today, 99% of all individuals are connected to an Arm chip-powered device.

“The future of AI is going to run on Arm, and it (the future of AI) is going to run here (Malaysia). We are thrilled and I applaud the vision of the Malaysian government — [its] ambition and courage to embark on such a programme,” Haas said.

“I know it was not easy, but we are not only exceptionally grateful, but we won’t let you down. This is going to be an extremely exciting 10 years and more,” he added.

Prioritising local players

Minister of Economy Datuk Seri Rafizi Ramli said for each of Arm’s CSS, the government is looking to build a complete supply chain in advanced industries, such as AI data servers, autonomous vehicles, internet of things (IoT), and robotics.

Economy Minister Datuk Seri Rafizi Ramli: For this to work, we have to put in place a collaboration structure with advanced foreign firms, proposed technology transfer and localisation requirements, so that we could uplift our local players in a realistic and holistic way.

“An ecosystem perspective also means that we will prioritise local players as the first resort for every part of the supply chain,” Rafizi said in his opening remarks.

“For this to work, we have to put in place a collaboration structure with advanced foreign firms, proposed technology transfer and localisation requirements, so that we could uplift our local players in a realistic and holistic way,” he added.

Rafizi also noted that outsourced semiconductor assembly and testing captures 5% to 10% of semiconductor supply chain value, while integrated chip design accounts for 60%.

Compared to his previously expressed timeline of five to ten years for Malaysia to begin producing its own chips, Rafizi has brought the projection earlier to five to seven years.

Source: The Edge