Tengku Zafrul: MITI to unveil new incentives to boost Malaysia's semiconductor industry

Malaysian Reserve

21-05-2025

SINGAPORE — The Ministry of Investment, Trade and Industry (MITI) is creating targeted incentives aimed at further boosting the growth of the local semiconductor industry, said its Minister, Tengku Datuk Seri Zafrul Abdul Aziz.
He said the announcement would be made in July to mark the first anniversary of the launch of the National Semiconductor Strategy (NSS).
'I can't reveal too much about what we will be announcing, but what I can say is that we are going to continue supporting this industry.
'We've been engaging with the industry to understand its needs and priorities. Of course, we know that what it wants is more fiscal support to strengthen the ecosystem, but also the right policy framework,' he said in his keynote address at the Malaysian Investment Development Authority (MIDA) supply chain event held here.
The event took place as part of the ongoing SEMICON Southeast Asia (SEA) 2025, the region's premier platform for the global electronics and semiconductor industry.
Tengku Zafrul added that MITI would continue working closely with players in the semiconductor sector as the ministry navigates changes within the industry amid geopolitical uncertainty.
He emphasised that Malaysia would continue to advocate global collaboration and dialogue to ensure the country remains relevant in the global supply chain.
'We recognise the sovereign right of nations to develop their domestic industries, but we must also stress the importance of global collaboration,' he said.
The minister noted that Malaysia has been part of the semiconductor industry since the 1970s and has grown steadily, built strong partnerships, and attracted some of the world's most renowned companies.
He said that last year, Malaysia's semiconductor sector contributed about US$130 billion (RM575 billion) to national electronics exports and now accounts for 13 per cent of global back-end semiconductor output.
Meanwhile, at a luncheon with industry leaders, Tengku Zafrul said Malaysia is actively diversifying its markets and has ratified 17 free trade agreements (FTAs) to date.
'The Malaysia-South Korea FTA will be finalised this October. We have resumed FTA negotiations with the EU. Negotiations for FTA upgrades with China and India are also ongoing at the ASEAN level, where Malaysia is leading the agenda this year as chair,' he said.
He added that Malaysia is also advancing negotiations on the Digital Economic Framework Agreement (DEFA) this year.
Earlier, Tengku Zafrul launched the Malaysia Pavilion at SEMICON SEA 2025.
The Malaysia External Trade Development Corporation (MATRADE) brought over nine Malaysian companies to participate in the event, offering a wide range of products and services tailored to the microelectronics and semiconductor value chain.
More than 90 Malaysian companies are participating in this year's SEMICON SEA. — BERNAMA