The Malaysian government has committed a total of RM75 million to enhance Penang’s technology sector, combining federal and state efforts to strengthen the region’s semiconductor and electronics ecosystem. The Federal Government will provide RM25 million to support a national automation, testing, and equipment (ATE) campus in Batu Kawan, while the Penang state government has allocated RM50 million to establish a new technology fund aimed at supporting startups and companies scaling up.
Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir confirmed that the RM25 million funding for the ATE campus was approved under the 13th Malaysia Plan (13MP), with the state government providing the land for the project. The campus design is inspired by a similar model in the Netherlands and is intended to advance automation, testing equipment, and AI-enabled manufacturing within Penang’s industrial landscape. “This is part of the Federal Government’s continuous effort to directly assist Penang,” Akmal Nasrullah said during the KL20 @ Penang 2026 summit at the Penang Waterfront Convention Centre.
The RM25 million for the ATE campus supplements an earlier RM50 million federal grant for the Penang Silicon Design @5km+ (PSD @5km+) initiative, located in Bayan Lepas. PSD @5km+ is geared toward fostering capabilities in integrated circuit (IC) design, artificial intelligence (AI), edge computing, and innovation through talent development, incubation, infrastructure sharing, and commercialization. The initiative includes approximately 30,000 square feet of incubation space, providing a launchpad for technological development and collaboration.
Penang Chief Minister Chow Kon Yeow highlighted the state’s RM50 million technology fund as a critical response to challenges faced by local startups and companies seeking capital. Chow expressed hope that the fund would expand through contributions from other stakeholders, thereby broadening access to financing across Penang and Malaysia.
Penang’s semiconductor ecosystem currently comprises around 30 Tier-1 firms, 18 supporting companies, and 20 publicly listed companies on Bursa Malaysia, collectively valued at about RM49 billion as of September 2026 and generating RM5 billion in revenue. This highlights the state’s prominent role in Malaysia’s advanced manufacturing sector.
At the national level, the Federal Government has allocated RM9.25 billion under the 13th Malaysia Plan to bolster industrial development and encourage advancement into higher value-added activities. This includes RM4.9 billion set aside for the Industrial Development Fund to attract multinational corporations and domestic companies to Malaysia, with a focus on Penang. An additional RM3.3 billion is earmarked for the Strategic Co-Investment Fund, enabling government partnerships through grants and co-investments to further industry growth.
Furthermore, RM1 billion has been designated specifically for the semiconductor sector, with initiatives such as a collaboration with ARM to enhance local intellectual property and design capabilities. Akmal Nasrullah emphasized Malaysia’s need to build greater ownership of technology, particularly in semiconductor design and advanced packaging, to move up the value chain. “For Malaysia, the next momentum is to penetrate into this higher value chain of semiconductors,” he said.
He also underscored Penang’s five decades of experience in semiconductors as a significant advantage in driving this transition. The government’s vision is to shift from “Made in Malaysia” to “Made by Malaysia,” focusing on scaling established capabilities and converting research and development into production.