Malaysia has 32 ARM chip design licenses. Here is what the government is actually doing with them.

At SEMICON SEA 2026, the minister responsible for Malaysia's semiconductor strategy gave the clearest public account yet of how the country's ARM IC design deals are being deployed.

Malaysia's push into semiconductor front-end design has a more concrete shape than most coverage of the New Industrial Master Plan (NIMP) 2030 suggests. At the opening of SEMICON Southeast Asia 2026, Investment, Trade and Industry Minister Johari Abdul Ghani gave reporters the most specific public breakdown to date of how the country's ARM IC design tokens are actually being deployed.

The tokens sit under a four-year agreement signed between MIDA and ARM Limited on 5 March 2025–the first national-level partnership Malaysia has forged with the UK-based semiconductor IP company. According to MIDA’s press release from a year ago, the collaboration was designed to train 10,000 Malaysian engineers in integrated circuit design, grant select local companies access to ARM's IP portfolio, and enable the development of Malaysian-made chips that meet global standards, with the explicit ambition of positioning the country as Asia's emerging IC design hub.

Fourteen months on, Johari told reporters the deployment is now underway. Of the 32 tokens secured under the agreement–25 basic and seven advanced–three of the advanced tokens have already been allocated to local companies working in partnership with industry players. Five companies are active on the basic tokens. The remaining advanced allocations are still being worked through.

"This deal was made before I came here into the ministry," Johari said. "We have four years to really look at who we can work with." It is a more granular picture than the headline framing that accompanied the original signing and for companies in the regional technology ecosystem tracking where Malaysia's front-end semiconductor participation is actually headed, the deployment detail matters.

From the back end, looking forward

The broader context Johari set out at the opening ceremony is well established but worth anchoring: Malaysia's electrical and electronics sector generated RM711 billion in exports last year, with semiconductor exports accounting for RM465 billion. The country has built decades of credibility in assembly, testing, and packaging. The question that SEMICON SEA 2026 is partly organised around is what comes next.

"When Malaysia started 30 to 40 years ago, we were very much in the back end," Johari told reporters. "It is only now we are realising how important the front end is–that is where fabrication supports and supplies all of this semiconductor industry."

The ARM licences are one answer to that question. Wafer fabrication is another. Johari pointed to Infineon's planned fab expansion at Kulim Hi-Tech Park as the model for how Malaysia intends to bring front-end capability onshore where domestic players cannot yet lead. "If we can't do it, we invite investors in and build," he said.

SEMI President and CEO Ajit Manocha put the scale of the opportunity and the window into numbers on stage. Eighty-nine new wafer fabrication plants are expected to come online globally by 2029. Southeast Asia, in current projections, will host six. By 2035, Manocha projected, the global semiconductor industry could surpass US$2 trillion, roughly double the US$1 trillion milestone now expected to be crossed this year ahead of the original 2030 target.

"Southeast Asia needs more wafer fabs to strengthen its position," Manocha said at his keynote address. "The opportunity is there, the question is whether the region can move fast enough to capture it."

What the ecosystem needs to deliver

The ARM licence allocation is not just a policy milestone, it maps directly to what needs to happen at the company level for Malaysia's front-end ambitions to become commercial reality.

IC design capability requires a pipeline of companies with access to the right tooling, the right process design kits, and the right foundry partnerships.

The three advanced ARM licence holders working with local companies represent the early stages of that pipeline. Whether those partnerships produce tape-outs, commercial designs, and eventually volume production is the test that follows the licence award. Johari was candid that the planning remains alive.

Asked how many fabs he expects to see built in Malaysia by 2029, he said the industry needed to help define that figure. "They have to feed me with the data so that from there, we can look into it–how many fabs do you think this country can take?"

That openness to industry input cuts both ways. It signals a government that is genuinely engaging rather than dictating targets from above. It also means the trajectory is not yet fixed, which is both an opportunity and a variable for companies watching where to place bets in the region.

MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, in remarks at the launch, framed Malaysia's position as one of active construction rather than passive positioning. "We are not simply maintaining our position in the global semiconductor supply chain, we are deliberately reshaping it," he said.