The industry cannot be built through incentives alone; it requires coordinated development among universities, technical institutes, supplier networks, logistics infrastructure, utilities, management capabilities and consistent long-term policies, he underscored.
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Visitors explore the exhibition area at the Da Nang Semiconductors and High-Tech Conference 2026. |
Othman said Malaysia’s National Semiconductor Strategy (NSS) sets concrete targets of attracting USD 125 billion in investment, providing USD 6.25 billion in fiscal support and training 60,000 highly skilled engineers to build at least 10 leading Malaysian semiconductor companies.
The strategy’s key strength, he said, lies in its pragmatism. Rather than immediately seeking to compete in advanced chip manufacturing with Taiwan (China), the Republic of Korea or the U.S., Malaysia is upgrading from an established position, currently accounting for around 13% of the global semiconductor testing and packaging market.
While downstream assembly creates jobs and export volumes, IC design and equipment generate deeper technological capabilities, higher margins and stronger domestic companies. However, he warned that Malaysia must avoid becoming merely an effective “home” for foreign companies while domestic suppliers and engineers remain only superficially integrated into the value chains.
Regarding Viet Nam’s target of training 50,000 semiconductor workers by 2030, Othman described it as ambitious and comparable in scale with Malaysia’s goal of 60,000 engineers. However, he stressed that the key issue is not simply numbers. Viet Nam needs specialized training for IC design engineers, process engineers, packaging specialists, equipment technicians, materials experts and production managers.
Another important lesson is the integration of domestic suppliers. Othman pointed out that many Malaysian companies remain beneath multinational corporations rather than being integrated into their high-value supply chains. He therefore recommended that Viet Nam avoid becoming merely a low-cost assembly location and encourage domestic firms to move deeper into precision engineering, cleanroom services, chemicals, substrates, automation and maintenance.
Infrastructure is another critical factor. Semiconductor investors require highly reliable electricity, water and logistics, as well as predictable regulations, areas Viet Nam needs to pay particular attention to as it seeks to attract major investors in the sector.
From a regional perspective, Othman sees Viet Nam and Malaysia as both competitors and potential partners. While the two countries compete for FDI, talent and tax incentives, strategically they should view each other as complementary partners in a shared ASEAN semiconductor ecosystem. Malaysia has an advantage in the depth of its established electrical and electronics (E&E) ecosystem in Penang, while Viet Nam offers scale, manufacturing momentum and strong geopolitical appeal.
Rather than pursuing isolated national projects, he suggested that Malaysia, Viet Nam, Singapore, Thailand and the Philippines could build an “ASEAN semiconductor corridor”, with each country contributing distinct strengths ranging from packaging and testing to electronics manufacturing and talent development.
Othman said the real challenge is not competition from neighboring countries, but whether ASEAN can transform itself from fragmented assembly hubs into an integrated semiconductor manufacturing region. He said he believes Viet Nam’s ambitions and Malaysia’s NSS should be viewed as parts of the same regional story, reflecting Southeast Asia’s efforts to move from being merely a manufacturing base to becoming a strategic link in the global technology economy.
Source: VNA