RM450m investments and a landmark pact with Dutch giant ASML mark Malaysia’s bold step up the semiconductor value chain
By Dr Mohd Safar Hasim
Malaysia’s economic diplomacy has entered a decisive phase. On September 7, 2025, the Ministry of Investment, Trade and Industry (MITI) announced that it had secured RM450 million in potential investments during a trade and investment mission to the Netherlands.
The investments, focused on the electrical and electronics (E&E) and machinery sectors, are not merely financial inflows. They represent a strategic alignment between Malaysia’s New Industrial Master Plan 2030 (NIMP 2030), the National Semiconductor Strategy (NSS), and Europe’s push for supply chain diversification in critical technologies.
The mission also coincided with the signing of a landmark Memorandum of Cooperation (MoC) between MITI Minister Tengku Datuk Seri Zafrul Abdul Aziz and Dutch Economic Affairs Minister
Vincent Karremans, involving the Dutch semiconductor giant ASML. This pact establishes an Annual Bilateral Semiconductor Dialogue, reinforcing Malaysia’s ambition to become a trusted Southeast Asian hub for advanced manufacturing and semiconductor services.
This commentary explores the significance of these developments, situating them within Malaysia’s industrial policy, the global semiconductor landscape, and the broader dynamics of Malaysia–Netherlands relations.
The RM450 Million Trade Mission Outcome
The RM450 million in potential investments secured during the Netherlands mission is targeted at hi-tech industries, particularly in the E&E and machinery sectors. These sectors are central to Malaysia’s industrial upgrading, as they underpin the country’s role in the global semiconductor supply chain.
MITI highlighted that the investments will:
* Strengthen Malaysia’s high-technology manufacturing base, particularly in Penang and Johor.
* Create skilled jobs, especially in semiconductor assembly, testing, and packaging (ATP).
* Enhance research and development (R&D) collaboration, focusing on renewable energy, automation, and Industry 4.0 applications.
The Netherlands is already a major partner for Malaysia. In 2024, it was Malaysia’s largest EU export destination and second largest EU trading partner, with bilateral trade reaching RM41.26 billion.
From January–July 2025, trade rose 15.9% year-on-year to RM25.76 billion. The Netherlands is also Malaysia’s fourth largest investor, with 314 manufacturing projects worth RM103.8 billion implemented as of June 2025, creating over 55,000 jobs.
The RM450 million outcome, therefore, is not an isolated achievement but part of a deepening economic relationship that has both commercial and strategic dimensions.
The ASML Cooperation Pact
The most significant outcome of the mission was the signing of the Malaysia–Netherlands Semiconductor MoC, which involves ASML, the world’s leading supplier of photolithography equipment used in advanced chipmaking.
The MoC establishes an Annual Bilateral Semiconductor Dialogue, focusing on:
* R&D collaboration in semiconductor technologies.
* Talent development, including training Malaysian engineers in advanced chipmaking processes.
* Policy alignment, ensuring regulatory frameworks support innovation and supply chain resilience.
* Supply chain diversification, positioning Malaysia as a reliable partner for Europe in the face of geopolitical uncertainties.
For Malaysia, ASML’s involvement is a gamechanger. While Malaysia has long been a global leader in semiconductor ATP, the partnership with ASML signals a move up the value chain. It opens opportunities for Malaysian firms and engineers to engage with the most advanced technologies in the industry, bridging the gap between ATP and frontend manufacturing.
Strategic Context: Malaysia’s Industrial Policy NIMP 2030
The New Industrial Master Plan 2030 aims to transform Malaysia into a hi-tech, high-income economy by focusing on advanced manufacturing, green industries, and digitalisation. The plan emphasises strategic sectors such as E&E, aerospace, and renewable energy, with a strong focus on supply chain resilience.
National Semiconductor Strategy (NSS)
Launched in 2024, the NSS sets ambitious targets:
* RM500 billion in semiconductor investments by 2030.
* 60,000 trained engineers to support the industry.
* Moving Malaysia from a focus on ATP to design, R&D, and advanced manufacturing support.
The Netherlands mission and the ASML pact directly support these goals, providing both investment capital and technological partnerships.
Global Semiconductor Landscape
The semiconductor industry is at the heart of global geopolitics. The US–China technology rivalry, supply chain disruptions during the COVID19 pandemic, and Europe’s push for strategic autonomy have all underscored the importance of diversifying production and securing reliable partners.
* United States: Through the CHIPS and Science Act, the US is investing heavily in domestic semiconductor manufacturing.
* Europe: The EU’s Chips Act aims to double Europe’s share of global semiconductor production to 20% by 2030.
* Asia: Taiwan, South Korea, and Japan remain dominant players, but Southeast Asia—particularly Malaysia, Vietnam, and Singapore—is increasingly recognised as a critical hub for ATP and supply chain resilience.
Malaysia’s partnership with the Netherlands and ASML positions it as a bridge between East and West, offering Europe a trusted partner in Asia while reinforcing Malaysia’s role in the global semiconductor ecosystem.
Malaysia–Netherlands Relations: Beyond Trade
The Malaysia–Netherlands relationship is underpinned by historical ties, given the Dutch colonial presence in Malacca in the 17th century. Today, the relationship is defined by economic cooperation, education, and sustainability initiatives.
* Economic Diplomacy: The Netherlands is Malaysia’s gateway to the EU, while Malaysia offers Dutch firms access to ASEAN’s 650millionstrong market.
* Sustainability: Both countries collaborate on renewable energy and circular economyinitiatives, aligning with global climate goals.
* Education and Talent: Dutch universities are popular destinations for Malaysian students, and academic exchanges support talent development in engineering and technology.
The ASML pact adds a new dimension, anchoring the relationship in the strategic semiconductor sector.
Challenges and Risks
While the developments are promising, several challenges must be addressed:
1. Talent Shortages: Malaysia must accelerate efforts to train engineers and technicians tomeet the demands of advanced semiconductor manufacturing.
2. Digital Divide: Ensuring that benefits extend beyond urban centres to rural areas is critical for inclusive growth.
3. Geopolitical Risks: The semiconductor industry is highly exposed to US–China tensions.
Malaysia must navigate these dynamics carefully to avoid overdependence on any single bloc.
4. Sustainability: Semiconductor manufacturing is resource intensive. Malaysia must balance industrial growth with environmental sustainability.
The RM450 million in potential investments secured during MITI’s Netherlands mission, coupled with the ASML-linked semiconductor cooperation pact, represents a strategic milestone for Malaysia.
It strengthens Malaysia’s role in the global semiconductor supply chain, supports the goals of NIMP 2030 and the NSS, and deepens Malaysia–Netherlands relations.
For Malaysia, the challenge is to ensure that these opportunities translate into long-term industrial upgrading, skilled job creation, and sustainable growth. For the Netherlands and Europe, the partnership provides a reliable Asian partner at a time of global uncertainty.
Ultimately, the Malaysia–Netherlands hi-tech partnership is more than an economic deal. It is a strategic alignment that positions Malaysia as a bridge between East and West, reinforcing its role as a critical player in the global semiconductor value chain.
The views expressed here are entirely those of Dr Mohd Safar Hasim, a Council Member of the Malaysian Press Institute (MPI)
WE