Malaysia leverages ARM IP to fast-track chip design

Malaysia leverages ARM IP to fast-track chip design

For decades, Malaysia has been known globally as a powerhouse in semiconductor back-end activities - assembly, testing and packaging. That strength remains vital, but the country is now trying to move up the value chain: from manufacturing chips designed elsewhere to designing and owning its own.

The latest push comes through a strategic partnership with Arm. By gaining access to Arm's intellectual property (IP), compute platforms and design tools, Malaysian companies are shortening chip design cycles and building local capabilities in integrated circuit (IC) design - a segment that typically commands higher margins and greater strategic value.

From backend to front-end

Malaysia's ambition is clear: transition from "Made in Malaysia" to "Made by Malaysia". The government has laid this out through the National Semiconductor Strategy (NSS), the New Industrial Master Plan 2030 (NIMP 2030), and the Thirteenth Malaysia Plan (RMK13). All three emphasise moving into high-value activities like chip design, advanced packaging, semiconductor equipment and wafer fabrication.

The partnership with Arm is operationalised through mechanisms like Arm Flexible Access (AFA) and Arm Compute Subsystems (CSS) tokens. These give selected Malaysian companies privileged access to Arm's IP portfolio and compute platforms, allowing them to design chips without starting from scratch on foundational architectures. As of mid-2026, four tokens had been approved to three companies - Great Asic Technology, SkyeChip and Oppstar Technology - with more companies in the pipeline.

The IC Design Park ecosystem

To support this shift, Malaysia has built a dedicated ecosystem around IC design. The Malaysia Semiconductor IC Design Park in Puchong (launched August 2024) and IC Design Park 2 in Cyberjaya (launched November 2025) provide subsidised office space, access to Electronic Design Automation (EDA) tools, IP services, Multi-Project Wafer (MPW) runs, testing infrastructure and early-stage funding support.

The parks are anchoring a growing cluster of companies. In October 2026, six homegrown chip innovations were unveiled with an estimated combined sales potential of RM300 million. These span edge-AI processors, storage for AI PCs/servers, Malaysia's first homegrown FPGA, automotive power regulators, satellite power controllers and flight controllers for autonomous drones. The companies behind them - including SkyeChip, MaiStorage, SiliconX, Infinecs, Weeroc Space and Alphaswift - are all based in the IC Design Parks.

Selangor has also established an Ehsan Semiconductor Fund (targeting RM100 million) to invest in early-stage semiconductor and AI application startups, complementing federal efforts.

Talent: the bottleneck that needs solving

Design capability ultimately comes down to people. The Malaysia-Arm partnership aims to train 10,000 IC design engineers over four years through the Arm On-Demand Training programme. By mid-2026, over 1,500 participants had undergone training, with the goal growing as more companies gain access to Arm technology.

The training pipeline is being supported by the Advanced Semiconductor Academy of Malaysia (ASEM), which is expanding to train up to 20,000 semiconductor engineers over the next decade. Entry-level IC design roles in the parks are already offering competitive starting salaries (around RM5,000-RM7,000), with experienced engineers commanding more - a sign that the market is beginning to value these skills.

From designs to products: the hard part

While the momentum is real, moving from chip design to commercial product is the hardest part. Designs need to go through industry qualification, secure customers, and often require manufacturing partnerships. The government is targeting the first "Made by Malaysia" chips to enter production by 2030, with initial designs expected to be completed by 2028.

This is not just about creating chips - it's about building markets for them. Without customer adoption and integration into supply chains, even well-designed chips won't translate into sustainable revenue or IP ownership. That means Malaysian companies will need to look beyond domestic markets and compete globally from day one.

Another consideration is ecosystem coordination. With multiple hubs (federal and state-level) emerging, the focus needs to be on complementarity rather than duplication - sharing talent, infrastructure and market access where possible.

What developers and engineers should watch

For engineers in Malaysia, this shift creates opportunities in areas that were previously dominated by overseas firms: RTL design, verification, physical design, embedded systems, AI/edge acceleration and chip security. The combination of subsidised tools, training and access to Arm IP lowers the barrier to entry significantly compared to going it alone.

For the broader tech ecosystem, locally designed chips could eventually feed into Malaysia's strengths in areas like IoT, automotive electronics, drones and industrial automation. But success will be measured not by the number of training slots alone, but by commercialised products, registered IP in Malaysia, high-skilled jobs retained locally, and Malaysian chips actually shipping in products sold globally.

The bottom line

Malaysia is leveraging its decades of manufacturing expertise and pairing it with Arm IP to fast-track into chip design. The IC Design Parks, talent programmes and RM300 million in announced sales potential from early designs show tangible progress. But the real test is execution: turning designs into products, securing global customers, and building a sustainable pipeline of Malaysian-owned IP. If done right, Malaysia can credibly claim a bigger piece of the semiconductor value chain - not just building chips, but designing them too.