Kateryna Karunska and Sam Grayling
January 7, 2026
Malaysia is emerging as a new semiconductor powerhouse
This video is part of: Centre for Advanced Manufacturing and Supply Chains
Malaysia’s semiconductor industry is booming. It’s centred in Penang. A state in northern Malaysia. Major players from Europe and the US are setting up shop or expanding existing operations. As they seek to build new global supply chains for these vital components.
Malaysia's semiconductor industry is experiencing a boom, centered in the northern state of Penang. Major European and US companies are establishing new facilities or expanding existing ones, aiming to build resilient global supply chains for these essential components.
Semiconductors: Powering the digital world
Semiconductors (microchips) are essential for modern tech, with over 100 billion used daily. But the supply chain is risky because one Taiwanese company, TSMC, makes most advanced chips. Experts worry this concentration could be disrupted by political issues or natural disasters.
Malaysia emerges as a new option
Seeking diversification, companies are turning to Malaysia. Penang attracted a record-breaking $12.8 billion in foreign direct investment in 2023, surpassing the total amount from the previous seven years combined.
Leading companies like Intel are investing heavily, with a $7 billion commitment to a new Penang plant. The Malaysian government considers this industry development a "critical goal."
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