Pacific Money | Economy | Southeast Asia

Malaysia’s Tech Talent Shortage

Industry leaders describe a war for talent.

Malaysia’s technology sector is experiencing a talent shortage so acute that salaries for skilled workers in Malaysia are now greater than those of their counterparts in Japan. According to a widely publicized study by Hays Specialist Recruitment Japan, Chief Technology Officers in Malaysia now command annual packages worth up to 28 million yen — surpassing Japan’s 26 million yen — while R&D directors in electronics earn 20 percent more than their Japanese counterparts.

The surge in compensation packages is driven by a mismatch in supply and demand. Multinational companies are flooding into Malaysia’s semiconductor industry and other sectors like data centers and cloud computing, creating new job opportunities. However, there is a severe skilled labor shortage. The government has acknowledged it needs 50,000 skilled engineers to meet industry demand, yet Malaysian universities produce only around 5,000 engineers annually, a tenfold shortfall that no policy fix can bridge overnight. Industry leaders describe the situation as a “war for talent,” with multinationals competing fiercely for the same shallow pool of experienced workers, driving up salaries and poaching from one another rather than growing the developmental pipeline. While the National Semiconductor Strategy (NSS) — Malaysia’s flagship policy to move the sector up the value chain from assembly into IC design and advanced packaging — has trained several thousand technical personnel since 2024, that figure remains a fraction of what the sector requires to........

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