Malaysia’s semiconductor industry is calling for stronger support in Budget 2027 to encourage reinvestment, expand research and development (R&D), and strengthen access to skilled talent. According to The Edge Malaysia, the Malaysia Semiconductor Industry Association (MSIA) said these measures are needed as advances in artificial intelligence, shifting global supply chains and growing competition for investment place greater pressure on the sector.
Despite attracting RM16.9 billion in approved semiconductor investments in 2025, Malaysia needs to help both new investors and companies already operating in the country move into higher-value activities. Among MSIA’s proposals are raising the qualifying expenditure limit under the Automation Capital Allowance from RM10 million to RM100 million and introducing a 200% tax deduction for qualifying R&D expenditure. The association also recommended targeted research grants, shared facilities and closer collaboration between industry and universities.
On talent development, MSIA proposed greater flexibility in how companies use HRD Corp levies, alongside easier access to specialised foreign professionals where local expertise is insufficient, with knowledge-transfer requirements. It also suggested allowing eligible international graduates in critical disciplines from Malaysian universities to work in the country for up to two years after graduation.
Other recommendations include simplifying customs procedures, modernising stamp duty rules and expanding support for Malaysian companies entering more advanced segments of the semiconductor supply chain. Together, the proposals aim to strengthen Malaysia’s competitiveness while creating greater opportunities for local businesses and talent. These are industry recommendations ahead of Budget 2027, rather than confirmed government measures.
“Budget 2027 is an opportunity to strengthen these fundamentals.”
— Datuk Seri Wong Siew Hai, MSIA president, as reported by The Edge Malaysia
Source: theedgemalaysia.com
