India, Malaysia to set up multi-layer chip collaboration during PM Modi's trip

NEW DELHI: India and Malaysia are in the process of establishing a multi-layered arrangement to collaborate in the semiconductor sector and the announcement is expected during Prime Minister Narendra Modi's visit over the weekend.

Combining India's design expertise and fabrication incentives with Malaysia's mature chip assembly, testing, and packaging ecosystem, the collaboration aims to enhance competitiveness in the global market, an official said. Malaysia is among the few countries in Indo-Pacific region that has a well-established semiconductor ecosystem besides Taiwan, Singapore and Japan. Malaysia is a premier global hub for the semiconductor assembly, testing, and packaging, with roughly 13% of the global market share and ranks as the sixth-largest exporter.

Penang serves as the central hub for major MNCs like Intel, Infineon, and Micron, leveraging a robust ecosystem to drive growth. The industry is rapidly advancing from back-end operations toward higher-value IC design and wafer fabrication, backed by the National Semiconductor Strategy.


"Malaysia has a very strong semiconductor ecosystem. Something like 30% of their exports relate to semiconductor and allied products. So, they have a really strong performance over many years in the area of semiconductors. They have almost 30-40 years of experience in those areas. So, we are in the process of establishing a multi-layered collaboration arrangement through a G2G MoU, semiconductor industry-led collaborations and R&D, both in terms of setting up fabrication centres, assembly testing centres etc. Our companies are also interested in collaborating with Malaysia," secretary (East), MEA, P Kumaran told the media on Thursday.