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May 8, 2025 – Penang’s strategic push to become a global powerhouse in semiconductor innovation took another significant step forward today. InvestPenang, spearheading the “Penang Silicon Design @5km+” initiative, in collaboration with the Ministry of Economy, the Malaysian Investment Development Authority (MIDA), and Arm Limited (Arm), hosted a pivotal Industry Briefing and Engagement Session. The event provided crucial insights into the landmark strategic partnership between the Government of Malaysia and Arm, a collaboration aimed squarely at catapulting Malaysia, with Penang at its core, into the top tier of global semiconductor design and intellectual property (IP) leadership.
This high-level session offered attendees a direct look into the framework of the national collaboration with Arm. This partnership is a cornerstone of Malaysia’s New Industrial Master Plan 2030 (NIMP 2030) and the National Semiconductor Strategy (NSS), signaling a determined shift from traditional manufacturing strengths towards fostering a high-value, IP-driven innovation economy. For investors and industry players, this underscores Penang’s commitment to cultivating an environment ripe for advanced technological development and high-value job creation.
Unlocking Penang’s Design Potential
The briefing detailed the key components of the Malaysia-Arm partnership, emphasizing its expected industry impact and the tangible benefits for businesses. Crucially, it outlined how local players can strategically contribute to and leverage this national initiative, along with the application process for program participation.
A significant focus of the engagement was on technical knowledge-sharing and capacity building. Participants received a comprehensive overview of Arm’s industry-leading Flexible Access (AFA) program and Compute Subsystem (CSS) solutions. These powerful tools are specifically designed to empower integrated circuit (IC) design companies, enabling them to accelerate product development cycles and significantly reduce their time-to-market – a critical advantage in the fast-paced global semiconductor industry. Furthering this, select participants attended closed-door technical sessions for an in-depth exploration of Arm’s CSS architecture and structural framework.
This milestone event builds upon the momentum generated since the official launch of the Penang Silicon Design @5km+ initiative on December 7, 2024. The overarching vision of this state-led initiative is ambitious: to enable the development of ‘Made by Malaysia’ AI chips – entirely designed, built, and tested locally.
Quotes from Leadership Underscore Strategic Importance:
The strategic importance of this collaboration for Malaysia and Penang has been consistently highlighted by key leaders in past events related to the Malaysia-ARM Partnership, and the “Penang Silicon Design @5km+” initiative :
- Echoing the national ambition, Prime Minister Datuk Seri Anwar Ibrahim previously stated on the Malaysia-Arm partnership: “Through this comprehensive partnership with Arm, we have conceived one of the most ambitious technological plans Malaysia has ever seen to pioneer ‘made by Malaysia’ AI (artificial intelligence) chips. These chips will be designed, manufactured, tested and assembled here, and sold to the rest of the world.” (Source: InvestPenang – The Edge reprint 19 Marcvh 2025)
- Highlighting the vision for the state initiative, Penang Chief Minister Chow Kon Yeow said at the launch of the Penang Silicon Design @5km+: “The launch of the Penang Silicon Design @5km+ initiative is a strategic move to strengthen Penang’s leadership in the IC design industry. With its integrated ecosystem within the vibrant 5km+ area, the initiative offers a unique value proposition, benchmarking itself against IC design hubs in Silicon Valley in San Jose, USA, and Taiwan.” (Source: Digital News Asia 9 Dec 2024)
- Datuk Loo Lee Lian, CEO of InvestPenang, speaking on the broader Arm partnership, emphasized its transformative potential: “By securing access to Arm’s advanced IP licences and CSS, the agreement empowers Malaysian semiconductor players to transition from back-end assembly and testing towards high-value chip design, development and innovation.” She further noted that the partnership will “further reinforce Penang’s established semiconductor ecosystem and benefit the newly launched Penang Silicon Design @5km+, which aims to provide a comprehensive framework to nurture integrated circuit (IC) design start-ups.” (Source: InvestPenang – The Edge reprint; 19 March 2025)
Significance for Penang’s Industrial Landscape & Investors
Today’s Briefing and Engagement Session, attended by over 70 key stakeholders including IC design companies, federal and state agencies, multinational corporations, and local firms, underscores a united commitment to this vision. By leveraging Arm’s advanced technology and fostering a collaborative ecosystem, Penang is strategically positioning its companies to produce high-value chips for burgeoning global markets in AI, IoT, automotive, graphics, and other advanced applications.
For investors, this initiative solidifies Penang’s role not just as a manufacturing hub, but as an emerging center for cutting-edge semiconductor design and IP creation. The focus on high-value activities, supported by robust government and industry collaboration, signals strong growth potential and a fertile ground for innovation and investment in Penang’s already vibrant industrial landscape. This strategic direction is set to further strengthen the nation’s, and particularly Penang’s, critical role in the global semiconductor supply chain.
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