22-4-2024 (KUALA LUMPUR) In a bold move to establish Malaysia as a regional digital powerhouse, the government has announced plans to construct Southeast Asia’s largest integrated circuit design park. This ambitious project, backed by a comprehensive package of incentives, including tax breaks, subsidies, and visa exemption fees, aims to attract global technology companies and investors, further solidifying the country’s position in the burgeoning digital economy.
Unveiling the initiative during the KL20 Summit, an event dedicated to launching new policies to support Malaysian startups, Prime Minister Anwar Ibrahim underscored the nation’s determination to transition beyond its traditional role in backend chip assembly and testing, propelling it into the high-value front-end design realm.
“The proposed integrated circuit design park is part of Malaysia’s efforts to move beyond backend chip assembly and testing and into high-value front-end design work,” Anwar affirmed, highlighting the country’s aspirations to ascend the technological value chain.
Malaysia’s semiconductor industry already commands a formidable presence on the global stage, accounting for approximately 13 percent of worldwide testing and packaging operations. However, the government’s vision extends far beyond its current capabilities, as Anwar outlined plans to transform Kuala Lumpur into a regional digital hub, setting the ambitious goal of ranking among the top 20 countries in the global startup ecosystem index by 2030.
To realize this ambitious undertaking, the integrated circuit design park will be backed by Malaysia’s central Selangor state and will house world-class anchor tenants. Moreover, the government has stated its intention to collaborate with global companies such as British chipmaker Arm Holdings, further strengthening the project’s international appeal and fostering knowledge transfer.
Recognizing the need to incentivize global participation, the government has unveiled a comprehensive suite of incentives tailored to attract tech entrepreneurs, venture capital firms, and unicorns – startups reaching a valuation of $1 billion or more. These incentives include subsidized office spaces, exemptions on employment passes, relocation services, and lower corporate tax rates.
“We want to attract global unicorns to enter Malaysia, so that high-skilled and high-value jobs are created, besides developing a pipeline of future entrepreneurs and senior leaders in tech,” affirmed Economy Minister Rafizi Ramli, underscoring the government’s commitment to nurturing a thriving digital ecosystem.
In a complementary move, Malaysia’s sovereign wealth fund, Khazanah Nasional, will launch a dedicated fund to invest in innovative, high-growth Malaysian companies. With an initial allocation of RM1 billion (S$284 million), this initiative aims to fuel the growth of homegrown entrepreneurial ventures, further bolstering the nation’s digital aspirations.
