Malaysia will pay $250 million during a span of 10 years to Arm Holdings, a SoftBank-backed company, to acquire chip design blueprints, supporting its efforts to develop a domestic semiconductor industry.

Specifically in sophisticated graphics processing unit chips for artificial intelligence and data centers, the agreement seeks to promote Malaysia as a participant in semiconductor manufacture. According to official estimates, indigenous chip manufacture may start five to ten years from now.

Arm will establish its first office in Kuala Lumpur as part of the project, therefore increasing its footprint in Australia, New Zealand, and Southeast Asia.

The agreement calls for 10,000 Malaysian engineers to get training in chip design and manufacture, therefore enhancing local knowledge in these areas. Seven premium chip design blueprints from Arm will also be acquired by the nation so local businesses may create artificial intelligence processors.

With each indigenous semiconductor company estimated to bring in between $1.5 billion and $2 billion annually, Malaysia wants to create ten of them. To support artificial intelligence servers, driverless cars, Internet of Things devices, and robots, the government is also striving to build an integrated end-to-end semiconductor supply chain.

Local businesses will be chosen by the national Economy Ministry and Arm together to guarantee efficient use of the acquired intellectual property.

Major technology companies like Microsoft (MSFT, Financials), Nvidia (NVDA, Financials), Google (GOOGL, Financials), and ByteDance have spent billions in Malaysia since 2023 mostly in cloud services and data centers.

Offering tax incentives, subsidies, and visa exemption to attract multinational semiconductor companies, Malaysia announced intentions in April 2024 to build the biggest integrated-circuit design park in Southeast Asia.

The government claimed to be working with top manufacturers, including Arm, to increase its capacity for manufacturing.