“Malaysia has struck a confidential agreement with Arm Holdings to secure chip technology,” reported Danial Azhar in Kuala Lumpur for Reuters. The government has disclosed that Malaysia will be paying Arm Holdings $250 million over the course of 10 years to access the company’s chip design schematics for local manufacturers. This move comes as Malaysia aims to develop its own chip production capabilities within the next decade, particularly in response to the rising demand for artificial intelligence technologies.
The Southeast Asian country is setting its sights on manufacturing its own graphics processing unit chips over the next five to ten years, aligning with the expanding requirements of AI and data centers. Economy Minister Rafizi Ramli stated that the government’s payment to Arm will cover the acquisition of intellectual property, including seven of Arm’s advanced chip design blueprints. Additionally, as part of the agreement, 10,000 engineers in Malaysia will undergo training, underlining the commitment to developing local expertise in this field.
Rafizi shared that Malaysia anticipates this partnership with Arm to enable domestic producers to enhance their capabilities, with the goal of establishing 10 local chip companies generating annual revenues ranging from $1.5 to $2 billion each. Both the economy ministry and Arm will outline specific selection criteria for these local companies to ensure the successful utilization of the acquired intellectual property and facilitate efficient production processes.
The government will be identifying local companies equipped with the necessary skills and know-how to promptly commence chip manufacturing operations. Several prominent tech companies, such as Microsoft, Nvidia, Google (a unit of Alphabet), and China’s ByteDance, have recently announced substantial digital investments in Malaysia starting from 2023. These investments primarily focus on cloud services and data centers, reflecting an infrastructure expansion driven by the surging demand for AI technologies.
In a related development, Malaysia announced last April its plans to construct Southeast Asia’s largest integrated-circuit design park, offering incentives like tax breaks, subsidies, and visa fee exemptions to attract global tech firms and investors. Prime Minister Anwar Ibrahim emphasized that the park will host leading international tenants and engage in partnerships with global entities like Arm to foster technological advancements within the region.
(Reporting by Danial Azhar; Editing by John Mair)
