Budget 2026: MSIA Seeks Strategic Push For 'Made By Malaysia' Initiative

By Siti Noor Afera Abu

KUALA LUMPUR, Oct 4 (Bernama) -- The Malaysia Semiconductor Industry Association (MSIA) hopes Budget 2026 will include a strategic announcement to fund key initiatives that support the “Made by Malaysia” agenda.

MSIA president Datuk Seri Wong Siew Hai said the strategy aligns with strengthening the country’s competitive edge and advancing the goals of the National Semiconductor Strategy (NSS).

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“This would encourage companies to move beyond research and development (R&D), commercialisation and innovation (RDCI), while enabling Malaysia to deliver real-world impact and build globally competitive capabilities.

“Budget 2026 is a golden opportunity for Malaysia to move from Made in Malaysia to Made by Malaysia. By delivering targeted cost relief, talent incentives, and stronger support for research, development, commercialisation, and innovation, we can accelerate the implementation of the NSS and secure Malaysia’s place as a global semiconductor powerhouse," he told Bernama.

Wong emphasised that the government should continue enhancing the ease of doing business by ensuring faster approvals for investment incentives, updating the Licensed Manufacturing Warehouse (LMW) framework to include R&D and design firms, and facilitating material movement between different entities within LMWs and Free Industrial Zones (FIZs).

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"The industry also seeks a streamlining of the Certificate of Completion and Compliance (CCC) processes, as there are differing requirements across states, which creates inefficiencies and higher compliance costs for companies investing nationwide. 

"There needs to be a plan to upgrade Customs systems countrywide and thus speed up the Customs approval processes for both imports and exports," he said.

Managing Rising Cost of Doing Business and Building Talent

Wong said MSIA is seeking relief on stamp duty, including exemptions for employment and intercompany contracts, deferments and clearer guidelines. 

The association is also calling for Sales and Service Tax (SST) relief through broader business-to-business exemptions, support for capital-intensive industries, and investment-linked incentives for energy efficiency and automation.

He said MSIA hopes that the government will introduce the policies to diversify export markets, grants for supply chain resilience, and the introduction of a qualified refundable tax credit to offset the impact of the global minimum tax and sustain Malaysia’s investment competitiveness.

Wong stated that the industry requires special government funding to improve Science, Technology, Engineering, and Mathematics (STEM) and artificial intelligence (AI) education in schools and universities.

MSIA also recommends focusing resources on public universities as semiconductor centres of excellence, to ensure resources are not spread too thin and are better utilised to support the industry.

"We need to encourage more students to pursue STEM studies, to strengthen the talent pipeline by providing tax relief and incentives for parents of students pursuing STEM," he said.

Wong highlighted that the industry requests targeted tax relief for engineers, especially those in design and development (D&D), smart manufacturing and advanced equipment to encourage and retain talents in Malaysia.

He said Malaysia needs to emulate other countries in utilising foreign STEM graduates and global expertise to fill immediate gaps and support Malaysia’s pursuit of advanced design and development for greater innovation success. 

Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, is scheduled to table Budget 2026 in Parliament on Oct 10.

-- BERNAMA