Khazanah and KWAP investment targets higher-value semiconductor activities
The RM1.2 billion allocation under Budget 2027 includes support for Selangor through a joint fund with the state government.
Malaysia's semiconductor companies are set to receive RM1.2 billion in investment from Khazanah Nasional Bhd and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) to support their shift towards higher-value activities, Prime Minister Datuk Seri Anwar Ibrahim said when announcing the Budget 2027 allocation.
Selangor was identified by Anwar as a key recipient of support. Khazanah will partner with the state government through a strategic fund aimed at developing semiconductor capabilities, particularly in microelectronics and integrated circuit (IC) design, to improve local companies' ability to compete internationally.
The allocation sits within GEAR-uP, through which government-linked investment companies (GLICs) are mobilising RM25 billion in domestic investment. The initiative seeks to bolster economic resilience while supporting sectors with higher-value activities.
A separate fund being established by Khazanah and InvestPenang will provide RM100 million for semiconductor and advanced manufacturing companies during their early growth stages. Penang has been designated Malaysia's technology finance centre.
The semiconductor investment also aligns with the National Semiconductor Strategy (NSS). Malaysia has about 13% of the global assembly, testing and packaging (ATP) market. The government and industry are seeking greater participation in higher-value technology designed and built locally, including advanced packaging and IC design.
