AGP Executive Report

Data Centres: Malaysia has approved 27 projects worth RM225.97 billion, mainly in Johor and Selangor. They are expected to create 4,053 jobs, including 3,523 high-skilled roles, with Malaysians set to fill nearly 90% of them. Digital Sovereignty: The government is developing a sovereign AI cloud to safeguard classified information from foreign laws and policies. Semiconductors: Budget 2027 aims to move local chipmakers into higher-value segments, including RM1.2 billion in support for domestic semiconductor companies. Energy & Shipping: NYK-MISC’s 10-year LNG charter with Malaysia LNG strengthens the country’s role in regional gas transport. Sabah Industry: Construction, manufacturing and services powered 5.1% growth last year, with the state now looking to turn expansion into higher-value industries and better jobs. Financial Security: Bank Negara says its National Fraud Portal has cut fund-tracing time by 75% as Malaysia tackles rising digital scams.

Technology Investment: Selangor’s Techsphere Summit is targeting a 30% rise in annual investment, bringing more than 33 global companies together around AI, semiconductors, green technology and workforce skills. Semiconductors: MIDA chairman Tengku Zafrul says local firms must move beyond assembly and testing into higher-value work such as chip design. Budget 2027 allocates RM1.2 billion to support that shift, plus a RM100 million fund for early-stage semiconductor and advanced-manufacturing firms. Penang Financing: A proposal would channel existing public funds to Malaysian technology companies through a new Penang technology finance hub, focused on semiconductor supply chains and private investment. Energy & Digital Infrastructure: Equinix says Budget 2027’s RM15 billion grid investment and extended green incentives should help align data-centre growth with energy readiness. Regional Growth: Sabah’s economy grew 5.1% last year, led by construction, up 28.3%, and manufacturing, up 5%; the state is seeking more high-value industries and local business growth. Trade: Perak recorded RM12.29 billion in trade in the first eight months of 2026, up 7.6% year on year, as officials push to connect local producers and SMEs with export markets.

Semiconductors: Malaysia’s chip exports to the US remain exempt from tariffs, while Budget 2027 sets aside RM1.29 billion to support semiconductors and startups. MIMOS says the priority now is turning research into commercial products and industrial adoption. Industrial Investment: NovaAir has opened a 300-tonne-a-day air separation plant near Kuala Lumpur and aims to lift utilisation above 90% within two years. IJM also won a RM1.23 billion contract to build AT&S facilities in Kedah. Energy and Logistics: A NYK-MISC venture signed a long-term charter to carry Malaysian LNG to Japan from 2028, while Sarawak plans integrated port management to improve efficiency. Market Pressures: Oil climbed towards US$95 a barrel as Gulf attacks threatened supply recovery, adding pressure to energy costs and the ringgit. Consumer Finance: Malaysians aged 30 and under made 65.9 million buy-now-pay-later transactions worth RM5.4 billion in the first half of 2026, or 36.7% of total transaction value.

Ports & Logistics: Sarawak plans to bring port regulation under one authority, cluster ports by strengths and upgrade facilities to improve efficiency and trade competitiveness. Industrial Investment: Yingde Gases has commissioned a 300-tonne-a-day air-separation unit in Greater Kuala Lumpur. Its NovaAir unit aims to lift capacity use above 90% within two years and expand in Malaysia. Trade: Malaysia is targeting a Malaysia-EU trade deal by June 2027, with nearly 80% of talks complete; palm oil and automotive issues remain. The government says US tariffs on Malaysian semiconductor exports have not been indicated. Technology & Skills: Budget 2027 sets aside RM6 billion for research and commercialisation, while Khazanah and KWAP plan RM1.2 billion for local semiconductor firms. The government also reports 74,332 workers have joined AI and automation-related upskilling programmes. Climate Resilience: Budget measures include RM2.5 billion to replace ageing water pipes and funding for flood prevention and conservation, though implementation will be key.

Industrial Expansion: German engineering group fischer has established a Malaysian subsidiary to support customers across construction, manufacturing and data centres. AI Infrastructure: Bitdeer secured an eight-year deal for a 60MW AI data centre at Cyberjaya, bringing its committed capacity across Malaysia, Norway and the US to about 333.5MW; AlphaESS and DB Energy are also planning battery-backed power for an AI data centre in Perak. Semiconductor Investment: IJM won a RM1.23 billion contract to build production and utility facilities for AT&S at Kulim Hi-Tech Park, with work due to start in the fourth quarter. Malaysia and Jordan are exploring semiconductor cooperation and technical training to develop skilled workers. Trade and Shipping: Eight of Malaysia’s nine anti-dumping measures cover iron and steel products, as MITI monitors unfair import pressures. A 10-year tax exemption extension for shipping companies, through 2036, aims to attract vessel registrations and support long-term investment.

Semiconductors: IJM Construction won a RM1.23 billion contract to build a production complex for AT&S at Kulim Hi-Tech Park. Work starts in Q4 and is due to finish within 14 months. Investment: Malaysia and Jordan discussed cooperation in semiconductors, advanced technical training and trade, while the government says it will diversify growth and exports to reduce exposure to a downturn in the chip cycle. Automotive: EPMB and China’s Hebei Shichang will invest RM100 million in a Selangor plant to make up to 200,000 Proton fuel tanks a year, with deliveries scheduled from March 2027. AI Manufacturing: TTM Technologies plans $400 million in additional investment across facilities in China and Penang to expand capacity for AI infrastructure products. Palm Oil: Malaysia’s stocks surged 24.5% to 3.51 million tonnes in September as production climbed to a record, while exports fell 12.1%. Clean Energy: U Mobile and HLGY Energy will explore private 5G, AI and automation for solar farm operations.

Budget 2027 & Workforce: Employers face a minimum-wage increase to RM2,000 from June 2027, alongside RM3 billion for training and expanded gig-worker protections. Export Resilience: Parliament is set to examine Malaysia’s reliance on electrical and electronics products, which account for nearly half of exports, and how the country would diversify if the semiconductor cycle weakens. Regional Energy: Higher energy costs have pushed half of Asean firms to delay decarbonisation plans, but 70% of Malaysian businesses surveyed said progress on the Asean Power Grid would make them more willing to invest. Agriculture & Fisheries: A veterans’ ginger project in Johor has recorded its first harvest, worth nearly RM1.2 million, with the full crop bought for market. Malaysia has licensed 36 deep-sea tuna vessels and is targeting 70 by 2030 to grow the industry.

Budget 2027: Tax changes could save five million taxpayers up to RM1,600 each, while manufacturers gain expanded sales-tax recovery on machinery and production inputs. Shipping firms also get extended tax exemptions and lower stamp duties on vessel financing. Trade & Investment: Deputy Prime Minister Ahmad Zahid visits China from Oct 12 to 16 to pursue cooperation in investment, technology and skills training. Malaysia and Egypt are also exploring opportunities in semiconductors, electronics, agriculture and pharmaceuticals. Food & Agriculture: A veteran-led ginger farm has recorded its first harvest, worth nearly RM1.2 million, with potential to spur local processing. Malaysia has licensed 36 deep-sea tuna vessels and aims to lift annual landings to 150,000 tonnes by 2030. Semiconductors: Penang’s 2,300-acre Silicon Island is planned as a growth hub for the chip industry, with projections of 220,000 jobs by 2050. Automotive: JPJ suspended new registrations and vehicle type approval for affected Chery Omoda 5 models after a rear-axle incident, pending technical checks and a potential recall.

Budget 2027: Tax relief and lower income-tax rates could lift household spending, while financing for MSMEs and mid-tier firms rises to a record RM57 billion. Trade and Investment: Malaysia and Egypt will deepen cooperation in energy, manufacturing, electronics, agriculture and pharmaceuticals, with a joint commission planned for early 2027. Mobility: EV registrations jumped 70.7% year on year in September to 6,029, taking the year-to-date total to 53,537. Palm Oil: Futures fell 1.48% after Budget 2027 omitted an expected export-duty waiver; traders are watching for September inventory and export data. Skills and Industry: The budget’s RM8 billion TVET allocation is expected to help train workers for sectors including semiconductors, AI and the digital economy.

Budget 2027: Malaysia is expanding support for local businesses, with RM57 billion in financing and guarantees for MSMEs and mid-tier firms, tax cuts for about 300,000 smaller businesses, and RM1 billion in export financing. Bumiputera contractor procurement rises to RM7.5 billion, with a price-adjustment clause to help cover higher project costs. Skills & Industry: RM8 billion for TVET and RM3 billion from HRD Corp to fund three million training opportunities aim to match workers with demand in sectors such as semiconductors, AI and digital services. Malaysia-Egypt Trade: The two countries elevated ties to a Strategic Partnership, identifying manufacturing, electronics, agriculture and pharmaceuticals for deeper cooperation; bilateral trade has grown 74.7% this year, albeit from a low base. Green Shipping: Industry leaders are urging Malaysia to coordinate ports, alternative-fuel bunkering and vessel investment through green shipping corridors to accelerate maritime decarbonisation. Creative Industries: FINAS is encouraging producers to use public funding to develop content for overseas markets and build sustainable export revenue.

Budget 2027: The government is directing funding toward industrial growth, infrastructure and food supply. PETRA received RM5.33 billion for water and energy projects, including RM2.5 billion to replace ageing pipes. High-Tech Investment: A RM100 million Penang fund will support semiconductor and advanced-manufacturing firms, while Budget measures aim to help Malaysian companies build capabilities and reach new markets. AI Infrastructure: Bitdeer secured 60MW of additional capacity at its Cyberjaya campus; Grab, SoftBank and PETROS are also exploring AI infrastructure development in Sarawak. Agrifood: Paddy farmers will receive RM2.62 billion in aid, with FOMCA urging the government to ensure support lifts production and keeps prices affordable. Manufacturing: Honda has started producing the new City Hatchback in Malaysia, adding to the country’s automotive manufacturing activity.

Budget 2027: Malaysia’s RM459.8 billion plan combines cost-of-living relief with a push into higher-value industries. It raises the minimum wage to RM2,000 from June 2027, extends green-tech tax incentives to 2030 and mobilises RM25 billion for domestic investment. A further RM2.62 billion for paddy farmers and RM300 million for agrofood projects target stronger local food supplies. Power & Data Centres: Peninsular Malaysia’s electricity use is forecast to rise 4.9% to 148.66 TWh in 2027, as data-centre growth increases the need for new generation and grid investment. Semiconductors: A new refining facility is set to strengthen Malaysia’s semiconductor manufacturing ecosystem and local supply chain. Factory Jobs: CJ Bio Malaysia’s Kerteh plant closure from Oct. 15 affects 372 workers; the government is overseeing termination benefits and job-placement support. Trade: Malaysia–South Korea trade is expected to exceed US$40 billion this year, with a concluded free-trade agreement set to deepen industry and technology links.

AI Infrastructure: Bitdeer AI has signed a 10-year agreement for a 67MW data centre campus in Malaysia, with delivery targeted by Q2 2027. It says secured capacity across its sites has reached about 273.5MW, with an active pipeline exceeding US$10 billion. Advanced Manufacturing: Penang’s Silicon Island project aims to expand the state’s semiconductor footprint, including advanced packaging, as land constraints limit existing clusters. Industrial Investment: A RM70 million joint venture between Japan’s TANAKA and Malaysia’s MEP Enviro has broken ground on the country’s first 99.99%-purity precious-metal refinery in Batu Kawan; operations are expected in 2029. KYZEN has also opened a larger Penang facility to serve semiconductor, electronics and other manufacturers. Energy Links: India and Singapore are exploring a 2,000MW power connection that could cross Malaysia, supporting regional electricity trade and clean-energy integration. Workforce: Malaysia’s 5G, AI and cloud training programme is targeting jobs for all 50 participants, while the government is offering 100,000 Malaysians free access to digital and AI courses.

Advanced Manufacturing: KYZEN opened a new Penang facility to expand production and technical support for semiconductor, electronics, automotive and medical-device customers. Investment: Penang attracted RM18.2 billion in US manufacturing investment from 2020 to the first half of 2026, and the state says it wants to help local semiconductor firms grow globally. Industrial Gases: Air Products will build Malaysia’s first LNG-based air separation unit at Pengerang, with capacity above 600 tonnes a day and operations expected by early 2027. Energy: Dialog Group’s Thai joint venture won operatorship of onshore Block L8/66, with a US$14.3 million minimum work commitment. Palm Oil: Malaysian futures rose 3.1% as India bought crude palm oil amid disrupted sunflower shipments; traders are also watching for a possible export-duty waiver in Budget 2027. Skills and Budget: The government says industry-led training is vital to move the economy up the value chain, while tomorrow’s budget is expected to balance household relief with growth measures.

Workforce: KESUMA is stepping in to support 372 CJ Bio Malaysia workers facing the Kerteh plant’s closure from Oct 15, with job profiling and employment assistance underway. Renewable Energy: Northern Solar secured a RM34 million contract to build a 9.5MW solar plant, due to begin operations by May 2027. Trade and Logistics: Johor Port is exploring a Belawan–Johor corridor with Indonesia’s Pelindo to improve cargo flows and strengthen regional supply chains. Infrastructure: The Pan Borneo Highway’s audit findings include delays, cost increases and planning weaknesses; just four of 35 Sabah Phase 1 work packages were complete as of Aug 25. Power Costs: MOF says TNB’s additional tax claim will not automatically be passed on to consumers through electricity tariffs. Waste Management: Malaysia and Japan renewed cooperation on circular-economy efforts as the country targets a 53% recycling rate by 2035.

Workforce: KESUMA is assisting 372 workers affected by the planned Oct 15 closure of CJ Bio Malaysia’s Kerteh plant, checking termination benefits and providing job-matching and upskilling support. Clean Energy: Northern Solar secured a RM34 million contract to build a 9.5MW solar plant, due to begin operations by May 2027. Shell also awarded KKB Engineering subsidiary OceanMight a contract to fabricate structures for offshore Sarawak gas fields. Trade Links: Johor Port is exploring a Belawan-Johor corridor to improve cargo flows and strengthen Malaysia-Indonesia supply chains. Infrastructure: Penang International Airport handled four million passenger movements in the first half of 2026 and won a regional airport award; Malaysia Airports says expansion will support the state’s high-value manufacturing ambitions. Power Supply: Regulators say data centres have pushed electricity-demand growth to about 10%, raising concerns over whether grid investments can be recovered when some operators make only short-term commitments. Responsible Business: Malaysia launched a human rights due diligence guide to help companies identify and manage risks across operations and supply chains.