Penang: Penang plans to shift from its current dominance in assembly and testing activities towards high-value upstream activities such as chip design, system architecture, and prototype development, in a bid to become a leading semiconductor design hub in ASEAN by 2040.
According to BERNAMA News Agency, the Draft Penang State Structure Plan 2040 (RSNPP 2040) (Review) released by the Penang State Town and Country Planning Department (PLANMalaysia Penang) aims to strengthen research and development capacity, innovation, and technology commercialisation to increase the added value of the state's semiconductor industry. The plan identifies several agencies, including InvestPenang and the Malaysian Investment Development Authority, as key players in implementing this agenda, alongside collaborations with the Northern Corridor Implementation Authority, Penang Skills Development Centre, Penang STEM, Perda-Tech, and Talent Corporation Malaysia (TalentCorp).
Based on indicators outlined in the draft, Penang aims for a gross domestic product growth of 4.7 percent per annum by 2030 and 4.6 percent per annum by 2040, compared to a 5.0 percent annual growth rate recorded in 2025. The manufacturing sector targets an annual growth of 4.4 percent for both 2030 and 2040, in contrast to the 5.9 percent growth achieved in 2025.
The state government is also focusing on developing local micro, small, and medium enterprises (MSMEs) into highly capable technology vendors within the semiconductor value chain through technological upgrading, automation, industry-standard certification, and global compliance. The RSNPP 2040 draft emphasizes the establishment of supply-chain integration mechanisms between multinational companies and local MSMEs to increase local content, technology transfer, and value-chain participation at the state economic level. The draft is open for public inspection and feedback until September 9, 2026.
In addition to semiconductors, Penang is targeting the transformation of its medical-device industry towards innovation by strengthening the existing cluster and encouraging the production of high-technology products, advanced automation, and engineering integration across the industry's value chain. According to the RSNPP 2040 draft, there will be a greater emphasis on certification capabilities and market approvals to enhance export access, global competitiveness, and the added value of the state's medical-device industry.
To diversify the economy, the state government is also proposing to expand high-value services and the digital economy by developing a Central Business District (CBD) for activities such as information technology, data and analytics, artificial intelligence, finance, digital engineering, and global business services (GBS) supporting regional and global operations. The draft also outlines plans to strengthen smart logistics services, trade facilitation, and industrial support services to boost export efficiency and resilience of the state's supply chains.
The Draft RSNPP 2040 (Review) is set to replace the RSNPP 2030, which is nearing its expiry. It serves as the state's strategic planning document, outlining the comprehensive direction for physical, economic, social, and environmental development up to 2040. The RSNPP 2030 achieved a high implementation rate of 99.3 percent, demonstrating its effectiveness in implementing the development policies and strategies that had been formulated.