Prime Minister Narendra Modi’s visit to Malaysia on 7 February 2026 is poised to become a pivotal chapter in India’s semiconductor story. It will tie New Delhi’s scale and design strength with Kuala Lumpur’s hard-won manufacturing expertise.

Malaysia today accounts for approximately 13 per cent of global back-end semiconductor production. It is anchored in decades of experience in outsourced assembly, testing and advanced packaging, with major global players using its Penang and Kulim clusters as critical hubs in their supply chains.

On the Indian side, the Semicon India Programme and the India Semiconductor Mission, backed by a Rs 76,000 crore outlay under ISM 1.0 and a further Rs 40,000 crore under ISM 2.0 announced in Budget 2026, have already cleared 10 projects worth about Rs 1.6 lakh crore. These include two fabrication plants and eight packaging units, signalling that India’s chip push has moved from intent to implementation.

Yet India still needs trusted partners to plug gaps in advanced packaging, testing expertise and fast-track integration into global value chains — precisely the niches where Malaysia has both capacity and credibility.

Delhi and Kuala Lumpur are now working on what is being described as a multi-layered semiconductor cooperation framework, which could become a new pillar in the bilateral economic relationship. Modi’s visit is expected to provide political sign-off to this architecture, potentially ratifying a broad arrangement that spans joint ventures in assembly and testing, talent pipelines, and supply-chain diversification for global corporations looking for a China-plus-one footprint across India and Southeast Asia.

At the invitation of my friend, Prime Minister Anwar Ibrahim, I will be visiting Malaysia, a nation with which India’s ties are deep-rooted and extensive. This visit will boost our Comprehensive Strategic Partnership and enhance cooperation across sectors.Malaysia is home to a…

— Narendra Modi (@narendramodi) February 7, 2026

If the agreement lands as anticipated, Malaysia could effectively become one of the keys that unlock India’s semiconductor ambitions, acting as India’s back-end and ecosystem partner even as domestic fabs and packaging plants come online. For PM Modi, it is an opportunity to frame India not just as a future chip manufacturer but as the anchor of a wider, Asia-centric semiconductor corridor in which Malaysia is an indispensable node.

Malaysia’s Five-Decade Semiconductor Journey

Malaysia’s semiconductor journey began in 1972, when Intel opened a five-acre assembly plant in Penang employing nearly a thousand people. By 1975, that single facility accounted for more than half of Intel’s global assembly capacity. The establishment of Malaysia’s first free trade zone that same year created the conditions for AMD, Hitachi and Hewlett-Packard to follow. By the early 1980s, 14 semiconductor firms were operating across the country.

Fifty years on, Malaysia has evolved from a low-cost assembly hub into a sophisticated ecosystem spanning outsourced semiconductor assembly and test operations, automated test equipment suppliers, and designers of high-performance test sockets. More than 50 semiconductor and chip manufacturers worldwide now have factories in Malaysia, with a significant concentration in Penang and the adjacent Kulim Hi-Tech Park in Kedah state.

The Kulim cluster has emerged as a particularly important node. Infineon Technologies, the German semiconductor giant renowned for automotive chips, has been in Kulim since 2006 and opened its most efficient silicon........

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