Malaysia emerges as a hotspot for semiconductor firms amid U.S.-China chip tensions
KUALA LUMPUR, MALAYSIA – 2018/01/24: A foreigner is seen with a Malaysia flag as a background. Kuala Lumpur or commonly known as KL is the national capital for Malaysia and is the fastest growing metropolitan regions in South-East Asia. The urban city is also well known to the world for tourism and shopping. Kuala Lumpur has a great public transportation for people travel around the city. (Photo by Faris Hadziq/SOPA Images/LightRocket via Getty Images)
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Malaysia is emerging as a hotspot for semiconductor factories as U.S.-China tensions prompt companies to diversify operations.
“Malaysia has well-established infrastructure with around five decades of experience in the ‘back end’ of the semiconductor manufacturing process, particularly in assembly, testing and packaging,” said Kenddrick Chan, head of the digital international relations project at LSE IDEAS, the foreign policy think-tank of the London School of Economics and Political Science.
Semiconductors – critical components found in everything from smartphones to automobiles – have been at the center of a U.S.-China technology war.
American chip giant Intel in December 2021 said it will invest more than $7 billion to build a chip packaging and testing factory in Malaysia, with production expected to begin in 2024.
“Our decision to invest in Malaysia is rooted in its diverse talent pool, well-established infrastructure, and robust supply chain,” Aik Kean Chong, Intel Malaysia’s managing director, told CNBC.
Intel’s first overseas production facility was an assembly site in Penang launched in 1972 with a $1.6 million investment. The company went on to add a full test facility as well as a development and design center in Malaysia.
Another U.S. chip giant, GlobalFoundries, in September opened a hub in Penang to “support global manufacturing operations” alongside its plants in Singapore, the U.S. and Europe.
“The forward-thinking policies and strong support from the regional government together with partners like InvestPenang have built a strong ecosystem for the industry to thrive,” said Tan Yew Kong, senior vice president and general manager of GlobalFoundries Singapore.
Germany’s top chipmaker Infineon in July 2022 said it will build a third wafer fabrication module in Kulim while Neways, a key supplier to Dutch chip equipment maker ASML, said last month it will construct a new production facility in Klang.
“Malaysia’s edge has always been its skilled labor in packaging, assembly and testing, and lower comparative operating costs, making exports more competitive globally,” said Yinglan Tan, founding managing partner at Insignia Ventures Partners. He added that the ringgit’s current position makes the country an “attractive location for foreign players.”
Malaysia holds 13% of the global market for chip packaging, assembly and testing services, said the Malaysian Investment Development Authority in a Feb. 18 report. Exports of semiconductor devices and integrated circuits increased by 0.03% to 387.45 billion Malaysian ringgit ($81.4 billion) in 2023, amid global chip demand weakness.
Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said many Chinese firms diversified some of their production to Malaysia, calling the country China’s “plus one.”
Zafrul Aziz, Malaysia’s investment, trade and industry minister, told CNBC in January that Malaysia aims to focus on the “front end” of the chip manufacturing process, instead of just the “back end.” Front end processes involve wafer fabrication and photolithography, while back end processes focuses on packaging and assembly.
In a bid to grow the country’s semiconductor ecosystem and attract investments, Malaysia in January set up a national semiconductor strategic taskforce, local media reported.
U.S.-China tensions
Similarly, countries like India and Japan have been courting foreign firms to set up operations on local soil as they aim to become major chip hubs alongside the U.S., Taiwan and South Korea.
India in February approved the construction of three semiconductor plants with investments of more than $15 billion. India in June approved U.S. memory chip giant Micron’s plans to set up a semiconductor unit.
In the same month, the world’s largest contract chip maker TSMC opened its first Japan factory as it diversifies away from Taiwan amid U.S.-China tensions.
Washington introduced sweeping rules in October 2022 aimed at restricting China’s access to advanced chip technology amid concerns that China could use them for military purposes. Last year, the U.S. announced new regulations preventing U.S. chip designer Nvidia from selling advanced AI chips to China.
“Malaysia and Asia in general is poised to benefit from the China-U.S. tech war, where access to advanced semiconductor chips are being weaponised as a tool to establish global technological supremacy,” said May-Ann Lim, director of the data governance practice at public policy consultancy Access Partnership.
Brain drain
While Malaysia stands to benefit from the U.S.-China chip war, its brain drain poses challenges as workers leave the country for better job prospects and higher salaries.
“This may well be the case if companies invest in upskilling the workforce in Malaysia, only to lose them to other competitors around the region once they have the skills,” said Lim.
An official study conducted in 2022 revealed that 3 out of 4 Malaysian workers in Singapore are skilled or semi-skilled, highlighting the country’s brain drain problem.
“Whether this demand generated by supply chain diversification will be met with enough supply of skilled talent in the country is still an ongoing operational challenge,” said Tan of Insignia Ventures Partners.
Malaysian Prime Minister Anwar Ibrahim in September said the government is looking to attract skilled Malaysians to return and contribute to the country.
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EToro, a stock brokerage platform that’s been ramping up in crypto, has priced its IPO at $52 a share, as the company prepares to test the market’s appetite for new offerings.
The Israel-based company raised nearly $310 million, selling nearly 6 million shares in a deal that values the business at about $4.2 billion. The company had planned to sell shares at $46 to $50 each. Another almost 6 million shares are being sold by existing investors.
IPOs looked poised for a rebound when President Donald Trump returned to the White House in January after a prolonged drought spurred by rising interest rates and inflationary concerns. CoreWeave’s March debut was a welcome sign for IPO hopefuls such as eToro, online lender Klarna and ticket reseller StubHub.
But tariff uncertainty temporarily stalled those plans. The retail trading platform filed for an initial public offering in March, but shelved plans as rising tariff uncertainty rattled markets. Klarna and StubHub did the same.
EToro’s Nasdaq debut, under ticker symbol ETOR, may indicate whether the public market is ready to take on risk. Digital physical therapy company Hinge Health has started its IPO roadshow, and said in a filing on Tuesday that it plans to raise up to $437 million in its upcoming offering. Also on Tuesday, fintech company Chime filed its prospectus with the SEC.
Another trading app, Webull, merged with a special-purpose acquisition company in April.
Founded in 2007 by brothers Yoni and Ronen Assia along with David Ring, eToro competes with the likes of Robinhood and makes money through fees related to trading, including spreads on buy and sell orders, and non-trading activities such as withdrawals and currency conversion.
Net income jumped almost thirteenfold last year to $192.4 million from $15.3 million a year earlier. The company has been ramping up its crypto business, with revenue from cryptoassets more than tripling to over $12 million in 2024. One-quarter of its net trading contribution last year came from crypto, up from 10% the prior year.
This isn’t eToro’s first attempt at going public. In 2022, the company scrapped plans to hit the market through a merger with a special purpose acquisition company (SPAC) during a sharp downturn in equity markets. The deal would have valued the company at more than $10 billion.
CEO Yoni Assia told CNBC early last year that eToro was still aiming for a market debut but “evaluating the right opportunity” as it was building relationships with exchanges, including the Nasdaq.
“We definitely are eyeing the public markets,” he said at the time. “I definitely see us becoming eventually a public company.”
EToro said in its prospectus that BlackRock had expressed interest in buying $100 million in shares at the IPO price. The company said it planned to sell 5 million shares in the offering, with existing investors and executives selling another 5 million.
Underwriters for the deal include Goldman Sachs, Jefferies and UBS.
— CNBC’s Ryan Browne and Jordan Novet contributed reporting
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Klay Thompson #31 of the Dallas Mavericks handles the ball during the game against the Memphis Grizzlies during the 2025 SoFi Play-In Tournament on April 18, 2025 at FedExForum in Memphis, Tennessee.
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Chime Financial paid the NBA’s Dallas Mavericks roughly $33 million over three years to have its logo worn as a patch on player jerseys, the company disclosed in its IPO filing Tuesday.
The Mavericks finalized the jersey deal, along with “certain other sponsorship and promotional rights,” in 2020, but terms weren’t announced. CNBC reported at the time that, citing an NBA official, that the league’s patch sponsorships ranged from $2 million to $20 million per season, depending on market size.
Chime, a San Francisco-based fintech company that provides online banking services like direct deposit and credit cards, plans to soon debut on the Nasdaq. Cynthia Marshall, who was CEO for the Mavericks from 2018 until December of last year, is on Chime’s board, so the company included details of the arrangement in the related party transactions section of its filing.
The company said it paid the Mavericks $10.5 million in 2022, $11.5 million in 2023 and $11.2 million last year.
Marshall told CNBC in 2020 that the decision to select Chime for its jersey patch came as the team was looking to fill its official sponsorship slot, which came with the deal. The logo has been displayed around American Airlines Center, where the Mavericks play their home games.
“We wanted somebody that was doing well as a business and growing,” Marshall said. “It’s a perfect fit.”
Chime’s IPO filing lands a day after the Mavericks shocked the NBA world by winning the draft lottery and the right to draft presumed top pick Cooper Flagg from Duke University. The Mavericks had only a 1.8% chance of landing the top pick based on where they finished in the standings. ESPN reported on Wednesday that the Mavericks plan to draft Flagg and are not considering the possibility of trading him.
It was a remarkably fortuitous turn of events for a front office and ownership team that’s been roundly criticized for months since trading franchise cornerstone Luka Doncic in February, bringing back older star Anthony Davis in return.
Longtime owner Mark Cuban sold a majority stake in the Mavericks in 2023 to casino owner Miriam Adelson and her family.
In October, the Mavericks announced a multi-year extension to its Chime deal, agreeing to showcase the brand and the company’s products more broadly. One new aspect was the creation of Chime Lane, “a dedicated entrance featuring exclusive benefits for Chime members during Mavs games and select events at AAC,” the team said in a press release.
— CNBC’s Jordan Novet contributed to this report.
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