Malaysia ICT Market

Main article: Malaysia

MyDigital - Malaysia's national digitalization program)

Main article: MyDigital (Malaysia's national digitalisation programme)

Chronicle

2024

ICT growth to $24.57 billion

At the end of 2024, the volume of the ICT market in Malaysia reached $24.57 billion. The industry is showing steady positive dynamics, as stated in the MarketResearch.com study, the results of which TAdviser got acquainted with in early March 2025.

Malaysian authorities are seeking to accelerate digitalisation across all key sectors, the report said. To do this, technologies such as the artificial intelligence Internet of Things (), IoT analytics, big data cloud computing, etc. virtual reality The development of blockchain, the ecosystem of digital payments, networks 5G and platforms continues. Business Process Automation (RPA)

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Фото: Unsplash

But there are also certain difficulties. The main obstacle to large-scale digitalization among Malaysian companies - primarily small and medium-sized enterprises - is significant financial spending. These are, in particular, the costs of connecting to the Internet, modern equipment, subscriptions to software and advanced training of employees. About 50% of small companies in Malaysia see funding as the top difficulty in rolling out digital platforms, according to surveys. On the other hand, the results of the study suggest that 94% of Malaysian companies intend to accelerate the introduction of advanced technologies.

The Malaysian Digital Economy Corporation (MDEC), which is a government agency under the country's Ministry of Digital Technology, predicts a sharp increase in spending on the digital economy: from 0.22 billion in 2021 to 2.55 billion in 2025. The country's ICT market, according to MarketResearch.com, expects a compound percentage CAGR of 8.31%. As a result, by 2029, the volume of the industry may increase to $36.63 billion.^[1]

Malaysia has launched a chip developer training program. For $5.33 billion they want to prepare 60 thousand engineers

In late May 2024, Malaysian Prime Minister Anwar Ibrahim announced that the country plans to train 60,000 highly skilled engineers in the semiconductor industry to become a global hub for chip manufacturing.

Malaysia is positioning itself as neutral territory for manufacturers with companies diversifying their supply chains amid growing rivalry between the United States and China. According to the national strategy, over the next 5-10 years, the government will allocate at least 25 billion ringgit ($5.33 billion) to train talented specialists and develop local companies. The funds will be provided by Malaysian sovereign wealth funds such as Khazanah Nasional.

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Фото: Unsplash

In collaboration with international companies, we intend to create an ecosystem managed by dynamic Malaysian firms and world-class talent ready to compete regionally and globally, Anwar stated.

The program is expected to train 60,000 specialists to work at various stages of chip production: from design to packaging and testing. Both public universities and corporations will be involved in the training program.

According to Malaysian Investment Development Authority data, the country provides about 13% of chip packaging, assembly and testing services worldwide by May 2024. Training qualified local engineers can be a crucial factor in attracting additional investment. The Malaysian government has already launched stimulus programs to attract the world's leading venture capital firms and technology startups to the country, and thanks to a new education program, hopes to attract 500 billion ringgit through direct domestic and foreign investment.^[2]

2023

Chip exports cut after record 2022

In 2023, Malaysia exported semiconductor products worth approximately 575.45 billion ringgit (about $123.49 billion at the exchange rate as of July 26, 2024). This is about 3% less than the result for 2022, when a record value of 593 billion ringgit was recorded. Such data at the end of July 2024 was released by the Malaysian state news agency Bernama.

Malaysia expects to become the new IT hub in Southeast Asia. The country, in particular, is betting on artificial intelligence technologies and big data platforms. Plans to create data centers (data centers) in Malaysia were announced by large American corporations, including Alphabet ( the parent structure of Google), Microsoft and Nvidia. In particular, Google intends to invest about $2 billion in the deployment of data centers and clouds in Malaysia, and Microsoft will spend $2.2 billion for these purposes. In turn, Nvidia, in partnership with YTL Power (the energy division of the Malaysian conglomerate YTL), is implementing a $4.3 billion project to create a high-performance computing platform for AI tasks in the country.

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Фото: Freepik

The Malaysian Semiconductor Manufacturers Association (MSIA) aims to increase chip exports to 1.2 trillion ringgit (approximately $257 billion) by 2030. This will allow the country to hold the position of the sixth largest chip exporter in the world. It is expected that the CAGR (average annual growth rate in complex percentages) in the export of chips by 2030 will be 7.6%.

To achieve its goal, Malaysia will focus on expanding its manufacturing capabilities, including the introduction of advanced chip packaging technologies. In addition, it is planned to attract a large number of qualified technical specialists.^[3]

IT market growth by 4.1% to $2.64 billion

In 2023, the IT services market in Malaysia reached $2.64 billion, which is 4.1% more than in the previous year. For comparison, in 2022, the growth rate was higher - approximately 5.5%. This is stated in the IDC study, the results of which were published on June 26, 2024.

Analysts note that large-scale IT investment in the corporate segment has declined due to slowing economic growth. The public sector has also reduced activity. However, the market has maintained positive momentum.

IDC divides the industry into three main areas: design-oriented services, managed services and support services. In 2023, the highest growth rates were recorded in the first of these segments - plus 4.5% on an annualized basis. In the other two categories, growth was 4.4% and 2.9%, respectively.

Analysts believe that in the future, the IT services market in Malaysia will continue to develop. The CAGR (compound percentage CAGR) from 2023 to 2028 is expected at 5.9%. As a result, by the end of the period under review, spending could reach $3.51 billion.

In the long term, a high level of investment in data centers in Malaysia will be a catalyst for the development of the IT services market, especially design-oriented and managed services, says IDC analyst Benjamin Ten.

The approved cybersecurity bill is expected to drive spending on managed services in industries related to the National Critical Information Infrastructure (NCII). And in May 2024, the Malaysian authorities announced their intention to train 60,000 highly qualified engineers and turn the country into a global center for chip production.^[4]

How the digitalization of the Malaysian economy is going

As of August 31, 2023, the coverage of the 5G network in populated areas of Malaysia reached 68.8%, and by the end of this year the figure is planned to be increased to 80%. This was announced on September 7, 2023 by the Minister of Communications and Digital Technologies of the country Fahmi Fadzil.

According to him, the digitalization of the economy is of great importance for Malaysia. Therefore, it is planned to introduce the so-called MyDID (Malaysia Digital Inclusion Index), which will help assess the current state of the industry and form targeted recommendations, including resource allocation and personnel development. The digital economy was estimated to account for 23.2% of the country's gross domestic product in 2021. By 2025, this figure is planned to be brought to 25.5%.

5G coverage in populated areas of Malaysia should reach 80% by the end of the year

At the same time, the necessary requirements for the introduction of digital technologies for enterprises will be introduced. To ensure the security of financial transactions and digital healthcare activities, end-to-end digital signature requirements must be met. Existing rules and guidelines are planned to be revised taking into account global trends, as well as the need to improve the sustainability of the digital economy.

As of the end of 2022, Malaysia provides 96.9 percent coverage with 4G networks in settlements, which is close to the 100 percent target by 2025. 7.7 million facilities have access to fixed broadband services. In 5G networks, data transfer rates average 105.8 Mbps versus 30.4 Mbps in 4G services.

As of 2022, a total of 1.13 million micro, small and medium-sized enterprises have mastered e-commerce. The Malaysian Digital Hub has 90 new startups and 200 local businesses have exported their digital solutions.^[5]

2022: Transfer of 70% of the state communications operator to private telecom companies

On March 16, 2022, Malaysian authorities announced that they were transferring up to 70% of the shares of the state-owned 5G network operator Digital Nasional Berhad (DNB) to private telecommunications companies amid concerns from the latter that a single fifth-generation state network could hinder competition. Read more here.

2021: Internet pirates to be jailed for 20 years in Malaysia

On December 18, 2021, the Malaysian House of Representatives passed copyright law amendments that would strengthen the country's deterrent measures against those who facilitate access to pirated content through illegal streaming. The amendments, which cover both hardware and software, could result in offenders jailed for up to 20 years. Read more here.

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