Tengku Zafrul urges Malaysian chip firms to expand into higher-value work

Malaysian semiconductor businesses should use support under Budget 2027 to build a larger role in activities such as integrated circuit (IC) design, Malaysian Investment Development Authority (Mida) chairman Tengku Datuk Seri Zafrul Abdul Aziz said.

In an interview broadcast on Bernama TV’s The Nation programme on October 14, 2026, he said Malaysia’s semiconductor industry had matured over more than five decades. However, it needed to expand beyond assembly and testing to gain more value from its involvement in global supply chains.

Khazanah Nasional Bhd and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) will invest RM1.2 billion under the budget to help domestic semiconductor firms enter higher-value segments. Khazanah and InvestPenang will also establish a RM100 million Strategic Investment Fund for early-stage semiconductor and advanced manufacturing businesses.

Tengku Zafrul said investment should benefit domestic businesses and supply chains, alongside greater spending on research, development and innovation. He also urged the government to ensure approved investments proceed within a reasonable period, noting that council and agency approvals remain a consideration for investors.

Manufacturing projects could require about two years between groundbreaking and factory completion, depending on the industry, he said. He also argued that businesses achieving greater profitability through efficiency and productivity improvements should pass some of those gains to employees through higher wages.