ARM will sign a $250 Million agreement with the Malaysian Government for the purchase of Chips and Technology | Focus: to meet the demand for AI and engineering training!

Today's chip production must contemplate the inclusion of architecture that enables AI data processing. In fact, we are seeing exponential growth in the demand for chips focused on processing neural network algorithms. It is not for nothing that this technological era is dominated by artificial intelligence; with much more sense if we observe the unbridled advance in which it develops and expands.

We should also talk about the technological battle that is advancing in the world. This is something important from every point of view, because it constitutes an advance with respect to technology, since the competition between first level companies, derives in products that can be much more promising. However, there will be a loser, which could be ridiculed in front of its competitors. In this sense, we can mention the birth of DeepSeek; a Chinese artificial intelligence that managed to be at the same level of the first level AIs, using much less resources. This means that the chip market, in which fortunes were being invested, will lose its raison d'être by offering inefficient computing power.

This in turn led to certain tensions between the United States and China. For, most of the AI we know today was born in the US. It didn't take long for venture investment firms, companies planning to invest in AI, and deals that were expected to be struck to diversify into promising companies.

Large companies have prioritized setting up their chip production plants outside the United States, and one of those countries chosen was Malaysia. If we go back to 1972, Intel had established its first production plant in Penang, Malaysia. Back then, a $16 million investment had been made for assembly space. In 2021, the same company had mentioned the investment of the large sum of $7 billion dollars on the occasion of establishing a chip assembly and test plant. We should also mention that an advanced 3D chip packaging plant is being built in this region, considered to be the largest.

Malaysia seems to be the ideal destination for the expansion of the chip market, through agreements between the Malaysian nation and companies that will bring this technology closer. If we are talking about a giant that has been known for a long time, we will surely think of ARM Holdings. This chip manufacturer is backed by SoftBank, which reached an agreement with the Malaysian government to boost chip design in a large ecosystem that continues to expand as the flow of investment increases.

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Malaysia has struck a 10-year, $250 million deal with ARM to provide local manufacturers with state-of-the-art chip design and technology. This agreement mentions the purchase of intellectual property, which includes the inclusion of seven ARM chip blueprints. This was revealed after the words of the Minister of Economy, Rafizi Ramli.

With this approach in mind, it is also expected to advance the training of 10,000 engineers. This is a first step forward, looking at it from the perspective of contemplating how to provide high-level education to engineers, in order to become proficient in the area of AI processing-oriented chips. Moreover, the Malaysian government has pledged $5.3 million to provide funding and training for 60,000 engineers, which represents the country's stance on focusing on a “National Semiconductor Strategy” that plans to leverage its existing infrastructure, boost the supply chain for advanced chips, and attract major customers and partners in this direction.

Another company that has selected Malaysia as the ideal destination to open facilities is GlobalFoundries, where it established its plants in 2023, also located in Penang, Malaysia. Neways, on the other hand, is a chip manufacturer of Dutch origin, which plans to expand operations globally, selecting Malaysia as part of its strategic interest to embrace the chip market, so it plans to build a high-tech manufacturing plant in Malaysia.

As we can see, Malaysia seems to be the ideal place to drive the architecture of chips that are based on AI. Mind you, the government is keen to become a chip manufacturing hub, so going forward, Malaysia intends to produce its own GPUs, in order to meet the huge demand for AI data processing.