Budget 2027: Tengku Zafrul urges local semiconductor firms to move up value chain

KUALA LUMPUR, Oct 14 — Tengku Datuk Seri Zafrul Abdul Aziz, chairman of the Malaysian Investment Development Authority (Mida), urged local semiconductor firms to move up the value chain during a recent interview on Bernama TV's The Nation programme. Speaking about Budget 2027, Zafrul highlighted the need for Malaysia's semiconductor ecosystem, which has been developing over five decades, to move beyond its traditional strengths in assembly and testing to generate greater value.

Under the budget, Khazanah Nasional Bhd and the Kumpulan Wang Persaraan (Diperbadankan) (KWAP) will invest RM1.2 billion to assist local semiconductor companies in advancing to higher-value segments of the industry.

Zafrul further explained that the Malaysian government aims to strengthen local supply chains by supporting early-stage semiconductor and advanced manufacturing companies through a RM100 million Strategic Investment Fund established by Khazanah Nasional Bhd and InvestPenang. The chairman emphasized that such investments should generate wider economic spillovers and create opportunities for domestic businesses, encouraging Malaysian companies to focus on research and development (R&D) and innovation.

Zafrul also stressed the importance of not only attracting investments but ensuring that approved projects are completed within a reasonable timeframe, noting that investment projects, particularly in manufacturing, could take approximately two years from groundbreaking to factory completion.

Regarding wages, Zafrul advocated for companies to translate productivity gains into higher wages for employees to ensure that economic growth benefits Malaysians' livelihoods. He expressed his support for companies to share profits resulting from improved efficiency and productivity with their workforce.