Beyond backend: AMD elevates Malaysia's role in global semiconductor value chain

The chip powerhouse plans to establish advanced packaging and design operations in Malaysia.

Advanced Micro Devices (AMD), riding high on its record-breaking quarterly performance, is placing a strategic bet on Malaysia at a time when semiconductor giants worldwide are reshuffling their global footprints.

The chip powerhouse plans to establish advanced packaging and design operations in Penang and Cyberjaya, signaling Malaysia's elevation from backend manufacturing to the high-value front end of semiconductor production.

"This morning, we had a meeting with AMD, the biggest semiconductor company in the world. They want to make Malaysia the spot for advanced packaging and design," announced Malaysian Prime Minister Datuk Seri Anwar Ibrahim.

The Prime Minister pledged full government support, stating that officials will assist in expediting the process – a commitment that comes amid challenging geopolitical conditions, including tariffs imposed by the United States on Malaysia.

"Even as we face these challenges, companies are coming in, choosing Malaysia, and making significant commitments," the Prime Minister noted, highlighting recent investment discussions with Japan, Bahrain, and China. "We must maintain discipline, foster a positive mindset, and capitalize on every opportunity."

Malaysia's semiconductor industry has traditionally focused on backend manufacturing and assembly rather than advanced packaging or design. Anwar emphasized this shift represents a long-awaited progression: "This is something we have long aspired to—back-end work alone does not elevate our technological capabilities."

For AMD, the Malaysian initiative comes as CEO Lisa Su announced the company is "expanding investments" in product road maps and go-to-market initiatives. During AMD's first-quarter earnings call on May 6, Su shared that despite economic uncertainties, the company's strategy involves significant investment in future growth.

"We view the current environment as a strategic opportunity to further differentiate AMD as we deliver an expanding product portfolio that combines leadership compute and AI capabilities for data centers, edge, PCs, and embedded end devices," Su said during the earnings call.

This expansion into Malaysia reflects AMD's broader strategy of strengthening its global position at a time when the company reported record quarterly revenue of US$7.4 billion, up 36% year-over-year, driven by significant growth in its Instinct GPUs and EPYC CPUs.

Anwar stressed the importance of innovation and knowledge transfer for Malaysia's tech sector: "Even if we adopt foreign technology, we must innovate and find new methods. This responsibility falls on our youth—they must surpass the current generation in mastering knowledge."

For Malaysia, securing AMD's advanced operations represents an opportunity to diversify its semiconductor capabilities beyond manufacturing and assembly. The investment comes as semiconductor firms reassess global operations amidst ongoing supply chain adjustments and geopolitical considerations.

While AMD's expansion offers potential economic and technological benefits for Malaysia, the long-term impact will depend on effective implementation, knowledge transfer, and the country's ability to develop the specialized workforce needed for these advanced operations. This marks one step in Malaysia's ongoing efforts to strengthen its position in an increasingly competitive and complex global semiconductor ecosystem.