The Malaysian government has confirmed striking a deal with Arm, the chip design company of the Japan-headquartered Softbank. In an exclusive interview aired over Bloomberg, Malaysian Economic Minister Rafizi Ramli said the deal with Arm involves Malaysia investing US$250 million to Arm over a period of 10 years for the access of chip IP designs.

From Back End to Front End

Accordingly, this will be the first time Arm will be sealing such a deal with a government as the country aims to fortify its focus to frontend in the semiconductor value chain.

“The (Malaysian) government has taken a radical approach where we work with Arm, a market leader, with the perspective of building the whole ecosystem and that we will be able to complement our strengths in back end and accelerate our move to the front end,” said Ramli.

Malaysian Prime Minister Anwar Ibrahim was supposed to witness on Wednesday (March 5) the signing of the agreement with Arm.

In the same interview, Ramli said semiconductor back end process, which is currently the predominant in Malaysia, captures only 10 to 15 percent of the supply chain. Whereas front end process captures 60 percent of the supply chain.

However, he said this would be difficult if the country will have to wait for its experts to develop organically. Thus, the reason why it is scoring a deal with Arm.

In the US$250 million deal, Malaysia aims to look 25 startups and seven subsystems having access to Arm’s IP library. This will boost the creation of about 7 to 10 chip companies that will yield at least US$15 to 20 billion in combined revenues. Moreover, Ramli said this will also have “spillover effect” to the country’s economy, which may see over 1 percent contribution to the country’s GDP in the long run.

05 March 2025