‘Made by Malaysia’: Anwar aims to tap tech and AI for developed nation goal

One key aim in Malaysia’s new economic plan is to make premium semiconductors amid headwinds such as high US tariffs and stubborn inflation

Malaysia unveiled its latest economic road map to climb the global value chain on Thursday as it aims to produce premium tech products such as semiconductors and tap into artificial intelligence (AI) in its push for developed nation status by 2030.

The “Made by Malaysia” aspiration is central to the 13th Malaysia Plan, the country’s five-year development blueprint for 2026 to 2030, and marks a strategic shift from its traditional role as a low-cost manufacturing hub.

Prime Minister Anwar Ibrahim said the plan would position Malaysia to lead Southeast Asia in AI, digital technology and green energy by developing locally designed, world-class products and services.

“Malaysia needs to move from being just a consumer, to a technology leader and producer of world-class ‘Made by Malaysia’ products and services,” Anwar said in parliament.

The concept was first floated in January by then-economy minister Rafizi Ramli, in the context of developing local semiconductor chips and graphics processing units. It signals a shift from Malaysia’s traditional role as a chip assembler towards designing and producing high-value, locally developed products as it aims to become a key player across the full spectrum of the global semiconductor sector.

Anwar said that while Malaysia was proud of its position as the world’s sixth-largest exporter of semiconductors, amounting to over 600 billion ringgit (US$141 billion) in 2024, it must now move further up the value chain.

“The success of securing a strategic partnership with ARM Holdings worth US$250 million earlier this year will elevate Malaysia from just a manufacturing hub to a leader in high-value semiconductor activities through the empowerment of intellectual property,” he said.

Anwar said the government projected its efforts would help grow exports by an average of 5.8 per cent annually and support economic growth of between 4.5 and 5.5 per cent over the new plan’s five-year term.

The government is also planning to restructure the economy from export-driven to a “consumption powerhouse”, which hinges on reforms and economic restructuring aimed at boosting national productivity and household incomes – a strategy Anwar described as “raising the ceiling and the floor” of the Malaysian economy.

Such goals, however, face strong headwinds, as many Malaysians still struggle with stagnant wages that have failed to keep pace with the rising cost of living. A recent rise in the consumption tax and an impending cut to fuel subsidies have added to household expenses and squeezed disposable income further.

To meet Malaysia’s target, Anwar said the government would focus on fresh “high growth high value” investments in sectors including semiconductors and the digital economy, green energy and rare earths.

The sectors are expected to create high-paying jobs that will raise the country’s per capita income to 77,200 ringgit (US$18,250) by 2030 from 54,793 ringgit (US$12,953) in 2024.

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Malaysia’s economy grew by an average of 5.2 per cent over the 2021-2024 period, according to government data, rebounding sharply from a 5.6 per cent contraction in 2020 when trade was all but halted by the Covid-19 pandemic.

Since taking office in November 2022, Anwar has made an aggressive push for fresh investments in hi-tech sectors ranging from semiconductors to data centres. Last year, his administration managed to secure a record 378.5 billion ringgit (US$89 billion) in approved investments for these sectors.

Malaysia has slashed costly blanket subsidies for electricity and diesel in a bid to narrow the government’s annual expenditure while increasing cash handouts and welfare aid for those most in need.

Economic growth, however, is expected to take a hit this year as the US pushes ahead with its plan to impose punishing tariffs that experts have said would crimp demand for Malaysian exports to the world’s largest economy and destabilise global supply chains.

Bank Negara Malaysia on Monday revised its 2025 forecast for the country’s growth to between 4 and 4.8 per cent, down from its initial range of 4.5 to 5.5 per cent, on expectations of weaker exports, even if Malaysia were to succeed in negotiating with Washington a tariff rate lower than a currently proposed 20 per cent by the August 1 deadline.