BIMB Bullish on Malaysia's Fabless Semiconductors Amid Value Chain Shift to AI and IC Design Leadership

BIMB Securities remains optimistic about Malaysia's fabless semiconductor companies as the nation advances up the semiconductor value chain.

Under the National Semiconductor Strategy (NSS), Malaysia is transitioning from assembly operations to high-value activities like integrated circuit design and AI-enabled chips.

Malaysia's Semiconductor Evolution Across States

Historically, Penang has been Malaysia's semiconductor pioneer, but now Selangor is emerging with the Southeast Asia's largest IC design hub in Puchong via SIDEC.

Selangor's 30% local content policy for data centers and partnership with Arm Holdings to train 10,000 engineers underscore its ambitious push.

In Penang, the new 36,000 sq ft Silicon Research & Incubation Space supports startups, backed by MYR 110 million in state and federal funding through PSD@5KM+.

Other regions like Kedah for manufacturing, Sarawak's ecosystem roadmap, and Johor near Singapore for R&D are diversifying the landscape.

AI Boom and ASIC Opportunities

The AI accelerator market is set to explode with a 16% CAGR to $604 billion by 2033, where ASICs will surge from 8% to 19% market share.

Malaysian strengths in packaging, testing, design, and government IC parks position fabless firms to capitalize on ASIC demand in hyperscalers, automotive, and healthcare.

China's self-reliance drive opens outsourcing doors, with Malaysia's neutral geopolitics and expertise in mature-node ASICs, RTL design, SoC integration, and IP enablement providing a competitive edge.

Future economic impacts include job creation through academies like Penang Chip Design Academy and positioning Malaysia as a global IC design leader.

Initiatives like Cyberjaya's second IC park by late 2025 will further accelerate talent development and innovation.