Talent Will Determine Malaysia's High-Tech Ascent

New Straits Times

14 hours ago

Malaysia is entering a critical phase in its economic trajectory. The government's National Semiconductor Strategy (NSS), complementing the New Industrial Master Plan (NIMP) 2030 anchored by Ministry of Investment, Trade, and Industry (MITI), signals a shift toward deep technology, advanced manufacturing, and innovation-led growth. Malaysia's efforts are already bearing fruit. Apart from record breaking investments in the past year driven by surge in technology and manufacturing sector, our improvement in the World Competitiveness Rankings by 11 spots, from 34 to 23, in the annual ranking published by Institute of Management Development reflects this shift.
At the core of this transformation lies the semiconductor industry—a sector that is not only economically strategic but also geopolitically consequential. Malaysia contributes around 13% of global back-end assembly, test, and packaging (ATP). But long-term competitiveness cannot be built on volume alone. Upstream capabilities in chip design, wafer fabrication, and IP creation are now prerequisites for value capture.
During the NSS launch, Prime Minister Datuk Seri Anwar Ibrahim set a bold ambition: attract RM500 billion in semiconductor investment by 2030 and train 60,000 high-skilled engineers. NIMP 2030 reinforces this with a broader aim to boost high-tech manufacturing, double median wages to RM4,500, and position Malaysia as a regional tech hub. These plans are well-timed and well-articulated—but they face a critical constraint: human capital.
The Talent Bottleneck: Malaysia's Biggest Risk Factor
Malaysia has no shortage of university graduates, yet employers continue to report shortages in areas most relevant to frontier tech industries. This talent gap is a major barrier to entry into upstream semiconductor activities, where global competition is fiercest.
The problem is not unique to Malaysia. Globally, the semiconductor sector faces a forecasted shortfall of over 1 million skilled workers by 2030, according to reports by research houses. However, countries are responding with decisive and focused interventions.
Local Models: K‑Youth and Industry-Led Programmes
Malaysia has already begun investing in new workforce development models. One example is government-linked Khazanah Nasional's K‑Youth Development Programme. Having trained over 8,000 participants with an 83% placement rate, the programme combines technical training, soft skills, and paid industry placements, co-designed with employers. RM200 million has been committed to train 11,000 more in 2025.
Additionally, 42 Malaysia (42MY)—a free, peer-to-peer coding school established by Khazanah—focuses on digital and programming skills that are increasingly relevant in chip design, embedded systems, and AI-enhanced manufacturing.
Apart from GLCs, multinationals are also stepping up. For example, Infineon Technologies, which is investing RM25 billion in Melaka, has partnered with local polytechnics to build a semiconductor talent pipeline with skills-based training. Intel Malaysia's latest RM30 billion expansion in Penang includes a commitment to upskilling over 4,000 local engineers.
Internationally, Malaysia can draw useful lessons from peer economies. TSMC's Semiconductor Academy aligns curriculum across universities with the direct needs of chip fabrication and design. Meanwhile, India's Semiconductor Mission is setting up chip design and packaging skill hubs through its IIT system and private sector partners like Vedanta-Foxconn.
Without a comprehensive approach to workforce development—backed by industry, GLCs, and academia—Malaysia risks missing the window.
Linking Talent to Capital and Capability
Beyond training, Malaysia's long-term semiconductor success requires simultaneous investment in ecosystem resilience and industrial capability. And again, capacity building initiatives such as this requires push from government-linked companies with national interest mandate. Through catalytic capital deployment under programs like Dana Impak, also introduced by Khazanah to transform firms and cultivate innovation, Malaysia seeks to unlock high-value segments in the global semiconductor chain.
These efforts aim to deepen local value-creation and future-proof Malaysia's position in global supply chains. By aligning talent strategies, capital investment and vendor development, Malaysia is leveraging a once-in-a-generation opportunity to create a resilient, innovation-led economy that celebrates the ethos of establishing a nation that creates.
Policy Implications and Execution Priorities
To convert plans into capabilities, three actions are critical. First is deepening Industry–Talent Integration. Scale up models like K‑Youth and university-industry consortia to target advanced semiconductor roles.
Second, is to accelerate R&D–Training Hubs. Fast-track the IC Design Park in Selangor and the Kerian Integrated Circuit Hub in Perak—while ensuring they include training centres in their architecture.
Third, and most critical, is to strengthen governance and coordination across stakeholders. A Semiconductor Talent Council—housed within MITI or in collaboration with agencies like HRD Corp—should track skills supply and demand, fund upskilling programmes, and ensure inter-agency alignment across MOHE, MOF, GLICs like Khazanah, EPF, KWAP and other private sector investors in a whole of nation approach.
Competing on Talent, Not Tax Incentives
Malaysia cannot out-subsidise or out-infrastructure global competitors. But it can out-execute in talent development—if the effort is strategic, coordinated, and industry-driven. Khazanah's K‑Youth, Infineon's polytechnic partnerships, and Intel's upskilling initiative provide promising blueprints. The challenge is to scale fast and deepen specialisation, aligning with NSS goals.
Semiconductors are not just a high-value export; they are the gateway to an entire future economy. Malaysia's competitiveness—like its sovereignty—will increasingly depend on its ability to create and retain deep tech talent.
GLCs must continue to act as enablers of Malaysia's new economy, giving opportunities to skill local talents who will be the drivers that will lift the ceiling and achieve the lofty ambitions set by the Madani Economic Framework. More GLCs should redirect their effort in cultivating technology sectors and move us up the value chain as nations that innovate and create, securing our economic future. We must act faster.
In short: Malaysia as a whole must invest in people as aggressively as we invest in plants. That will determine whether we are merely part of the global semiconductor conversation—or helping to lead it.