Korea built champions. Penang can too

In 2025, two South Korean companies had the best year of their existence, and the whole country felt richer for it.

SK Hynix overtook Samsung Electronics in operating profit for the first time, riding a global stampede for the memory chips that make artificial intelligence possible. Both firms posted record numbers, and both wins belonged, in a real sense, to Korea.

The figures are hard to fathom. SK Hynix earned an operating profit of about RM124 billion as revenue leapt by roughly half to around RM255 billion, powered by high bandwidth memory (HBM), the stacked chips that feed AI data centres.

Samsung, for its part, posted record revenue of about RM875 billion, with its chip sales alone worth around RM288 billion.

What makes these results national rather than merely corporate is their sheer weight. By May 2026, Samsung and SK Hynix alone made up a record 42.2% of the Kospi, South Korea’s main stock index.

Samsung Group’s businesses generate close to a fifth of everything the country exports, and in 2024 the firm was reckoned to have powered around half of Korea’s entire economic growth.

Success on that scale does not stay locked inside a balance sheet. Nvidia chief Jensen Huang, whose prized AI chips depend on Korean memory, recently hailed a partnership he said would “energise Korea’s AI ecosystem”. When a champion thrives, it turns its private fortune into a public one.

The clearest proof is rising out of the ground south of Seoul. In Yongin, Samsung and SK Hynix are anchoring what the government calls the world’s largest semiconductor cluster, a plan for thirteen new plants backed by more than RM2.5 trillion in combined investment and, by official projection, millions of jobs over the next two decades. A single industry has become a nation-building project.

This is what champions do. They pull a galaxy of suppliers, universities and smaller engineering firms into their orbit. Wages climb, bright graduates stay home, and the national flag travels the world on the back of a logo. That is the quiet machinery behind Korea’s ascent.

So where does all this leave Malaysia? In a far stronger position than our own modest national conversation usually admits.

Malaysia is already one of the most important nodes in the global chip supply chain.

Penang alone handles around 13% of the world’s semiconductor assembly and testing, the country ranks as the sixth largest semiconductor exporter on earth, and the island has long worn the nickname “Silicon Valley of the East”, home to a host of multinationals and thousands of local suppliers.

Here is the genuinely exciting twist. The back end of the industry—the packaging and testing that Malaysia quietly mastered over five decades—is no longer the low-value tail of the business.

As advanced chips like HBM are stacked and stitched together, advanced packaging has become one of the fastest growing and highest margin frontiers in the entire sector.

The value is migrating towards exactly where Malaysia already stands.

Which brings us to the question of a champion. The most promising answer may no longer be a single company, but a pack of them moving together.

In 2026, five Malaysian firms, anchored by Inari Amertron, the country’s largest homegrown chip assembler, joined forces as the Malaysia Advanced Packaging Consortium, with a shared target of capturing 7% of the global advanced packaging market by 2035, worth roughly RM20 billion a year.

Inari already turns over about RM1.35 billion a year and is worth around RM7.4 billion on Bursa Malaysia. Beside it stand equipment makers, automation specialists and chip design hopefuls—the kind of tight-knit cluster Korea itself would recognise from its early years.

None of them is a Samsung yet.

So how do we help them get there? The encouraging news is that the help has already started.

The government recently placed RM185.8 million of research grants and matching funds behind the consortium’s first projects. The task now is simply to keep going, steadily, for years rather than budget cycles.

Three things would matter most. First, treat our champions as partners rather than mere incentive recipients: make government linked companies and universities their earliest customers, their test beds and their talent pipeline.

Penang’s new chip design academy, which Chief Minister Chow Kon Yeow called “a strategic leap forward in Malaysia’s semiconductor ambition”, is exactly the kind of foundation worth multiplying.

Second, help these firms climb from doing the work to owning the technology, the patents, the tools and the designs where the richest margins live.

Third, patience. Korea’s golden year in 2025 was seeded by decisions taken decades earlier and held on through every painful downturn in between.

Malaysia does not need to invent a semiconductor industry from scratch. It already has a thriving one, sitting on ground that is quietly rising beneath it. The only real question is whether we choose to back our own firms long enough to let them stand tall on it.

For fifty years, the world’s chips have passed through Malaysian hands. Now it is time some of them carried a Malaysian name.

The writer can be contacted at kathirgugan@protonmail.com.

The views expressed are those of the writer and do not necessarily reflect those of FMT.

المصدر: Free Malaysia Today