1. Yang Amat Berhormat Tuan Chow Kon Yeow Chief Minister of Penang

2. Yang Berbahagia Dato’ Haji Zulkifli Long State Government Secretary of Penang

3. YB Mr Wong Hon Wai Penang State EXCO

4. Yang Berbahagia Dato' Zabidah Safar State Finance Officer of Penang

5. Yang Berbahagia Dato’ Loo Lee Lian Chief Executive Officer of Invest Penang

6. Yang Berbahagia Dato’ Mohammad Azhar Hamdan Senior Deputy Chief Executive Officer of Penang Development Corporation (PDC)

Esteemed guests,

Members of the media,

Ladies and gentlemen.

Good morning, Salam Perpaduan, and Salam Malaysia MADANI.

1. I must thank the Chief Minister of Penang, YAB Chow Kon Yeow, and the team from Invest Penang for having me here today. It’s always good to be back in Penang, and I’m excited to speak about the booming semiconductor industry.

2. The semiconductor industry has had a long history in Malaysia. Intel, for example, set up its factory in Penang in 1972, and in fact, it is the 3 company’s first factory abroad. Since then, Malaysia has been attracting semiconductor players from all over the globe. Interest in our country as a potential investment destination has heightened in recent times, due to geopolitical tensions that have prompted companies to diversify their operations.

3. Penang alone has attracted a record-breaking USD 12.8 billion in foreign direct investment in 2023, according to the World Economic Forum. This number has surpassed the total amount of investment from the previous seven years combined. Intel, among many others, continues to invest heavily in the state, with a USD 7 billion commitment to a new plant.

4. On Tuesday, the Department of Statistics Malaysia said the country saw encouraging economic performance in July 2024 with the leading index (LI) registering 5.2 per cent, reaching 115.1 points as compared with 109.4 points in the same month of the previous year. This growth is driven by the real imports of semiconductors which surged by 36.7%.

5. Tech giants are attracted to Malaysia due to various reasons. We have a stable government, we are strategically located, and we offer business-friendly policies. We also have agencies like Invest Penang and the Malaysia Digital Economy Corporation (MDEC) that support 4 investors and homegrown companies, aiding them in their quest to expand and soar.

Ladies and gentlemen,

6. Malaysia is well on its way to become the next generation digital hub in the region, if not the world. This is evident through the approved digital investments worth RM185.3 billion between 2021 and June 2024, as revealed by our Prime Minister YAB Dato’ Seri Anwar Ibrahim recently. They include ventures by tech giants such as Amazon Web Services (AWS), NVIDIA, Byte Dance, Microsoft, and Google. At the Amazon Web Services’ (AWS) Malaysia Region Launch Appreciation Dinner on Thursday night (Sept 26) , Dato’ Seri Anwar said the RM29.2 billion investment by AWS will turn Malaysia into a digital investment destination, create over 3,500 jobs and contribute RM57.3 billion to the nation’s GDP by 2038. And those are the returns from one company alone.

7. Our business-friendly policies and the strengthening of the Ringgit against the US dollar in recent times have also contributed to the positive outlook on Malaysia’s economy, further encouraging the inflow of investment funds. As Malaysia continues to attract investors, I am confident that the digital economy will meet, or even exceed, the projected 25.5% to Malaysia’s GDP by the end of 2025.

8. At the very heart of this growth are the chips that empower digital technologies. This signifies the importance of the semiconductor, and integrated circuit design (IC Design) industry. We must take concrete steps to maintain our mark in this sphere.

9. Maybank Investment Berhad, had earlier this month, highlighted that Southeast Asia is the world’s largest semiconductor exporter, accounting for 23% of global chip exports in 2022. It added that Singapore (10.8%) and Malaysia (7.0%) were leaders in the region. According to Maybank Investment Berhad, Malaysia’s edge lies in downstream assembly, testing and packaging (ATP), accounting for 7% of global ATP capacity – the largest in this region.

10. The recently launched Science, Technology, Engineering, and Mathematics (STEM) Talent Blueprint will certainly help ensure Malaysia has adequate talent in the scene. Penang’s STEM workforce will also support Malaysia’s New Industrial Master Plan 2030 and the National Semiconductor Strategy. I’ve been told that this blueprint will aim to train and upskill 60,000 high-skilled Malaysian engineers. This is in addition to the existing talent development programmes by MDEC, an agency under the Ministry of Digital.

11. I’ve been told that the ‘Penang Silicon Design @5km+’, will also have the Penang Chip Design Academy to churn out talents. There’s also the Silicon Research & Incubation @GBS Tech Space to help start ups prepare for New Product Introduction within the 5km+ vicinity. We all seek the same goal – to create a large pool of talent that will eventually raise the socio-economic wellbeing of the rakyat.

12. As we develop talents, we also need to find ways to attract them to work in Malaysia and ensure they retain here. When I saw the IC Design and Digital Park; and the Penang Cybercity @ Bayan Baru maps, I was drawn to the fact that there were malls, higher learning institutions, hotels and medical centres within the two areas. I am confident that the ecosystem around these areas will not only attract, but retain talents. This will lower the risks of talent drain, with the skilled workforce staying put in Malaysia. This will also allow the state, and the people of Penang to enjoy the economic spillover in many ways (ie. real estate; F&B).

13. We also need to support and provide incentives to our local players so that they become competitive. We also need to push for more research and development in this aspect, and to provide market access. Equally important, is that we require policies to support the states moving into the semiconductor scene.

14. I would like to commend the state government for its 'Penang Silicon Design @5km+' initiative. This is in line with efforts to make the 7 National Semiconductor Strategy a success and boost the electrical and electronics industry ecosystem in the state. Such a move will also help underscore Penang's pivotal role as a sustainable IC Design and Research & Development hub.

Ladies and gentlemen,

15. The Ministry of Digital was established to, among others, facilitate the growth of Malaysia’s digital economy. The government has been supporting talent development, helping to build the right ecosystem and create market access to companies that have set up their businesses in Malaysia. MDEC’s Malaysia Digital status for IC Design companies sees tax exemptions in place. There’s also the Crest Research & Development Grant. There is also assistance in getting foreign knowledge worker quota and passes; access to talent development programmes, and market access facilitation.

16. I’ve been briefed that MD-approved investments for IC Design and Embedded Software between 2023 and Q3 2024 are RM 1.98 billion. This creates 1,403 jobs, with seven out of the nine companies are based here, in Penang.

17. As such, MDEC will be looking at including IC Design-related courses into its Malaysia Digital Workforce Training Directory, and forge partnerships between industry players via its Premier Digital Tech 8 Institutions programme. These efforts will ensure Penang, and Malaysia, remain at the forefront of semiconductor innovation, driving growth and creating high-value opportunities.

18. I have been informed that the advisory panel of the Penang Silicon Design @5km+ comprises experts from various major companies. The executive council, meanwhile, is made up of representatives from the state government and Invest Malaysia. Such a public-private mix should be celebrated, for we will have the best from both worlds. The right policies can only be formulated when there is real, honest feedback from industry players.

19. On that note, the Ministry of Digital looks forward to working with the Penang government, Invest Penang and members of the Penang Silicon Design @5km+ to help Malaysian companies to become global champions, and to transform Malaysian talents into global stars.

20. Before I take my leave, I would like to reiterate my commitment, and that of the Ministry of Digital, that we will strongly support Invest Penang and the state government to advance our digital agenda. Let us work together to ensure that the semiconductor and IC Design scene flourish and reach greater heights.

Thank you. -END-