Malaysia has become a chip manufacturing hotspot, especially as tensions between the US and China are growing during the development of semiconductors used for AI applications. As expected, tech companies around the world are trying to diversify their chip sources, and ARM Holdings is now hoping to make the most of this opportunity.
The Softbank-backed chip maker said on Wednesday it signed an agreement to strengthen the country's chip design ecosystem with the Malaysian government.
As part of the deal, Reuters reports that Malaysia will pay $250 million over a decade to buy chip design and technology for local manufacturers. Specifically, countries that include seven blueprints for ARM chip designs will buy IP.
ARM said the partnership will also be seen training 10,000 Malaysian engineers with its technology.
The ARM declined to comment on the $250 investment from the Malaysian government. Representatives from the Malaysian government did not respond to requests for comment prior to publication.
The move is the latest in Malaysia's ongoing efforts to become a chip manufacturing hub within the next decade. Earlier this year, Malaysia said it plans to manufacture its own GPUs to meet the demands of its AI and data centers.
The Malaysian government said last May that it would obtain at least $5.3 billion in financial aid and train 60,000 engineers for the national semiconductor strategy (NSS).
According to a Trendforce report cited the Malaysian Investment Development Authority (MIDA), Malaysia has been involved in the chip industry for over 50 years and currently offers around 13% of global chip testing, assembly and packaging services.
In 1972, Inter established its first production facility outside the US in Penang, Malaysia, investing $16 million in its gathering site. The US chip giant in December 2021 said it would invest more than $7 billion to establish chip assembly and testing plants in the country, and is also building Malaysia's largest 3D chip packaging facility. US chip company GlobalFoundries will also open a new hub facility in Penang, Malaysia in 2023, while Dutch chip equipment manufacturer Neways plans to build a new factory in Malaysia.
Additionally, many tech giants, including Google, Microsoft and Nvidia, have announced billions of dollars in investments in Malaysia since 2023, primarily for data centers, AI development projects and cloud services.
