Semiconductor and software design company Arm Holdings signed a deal with the Malaysian government in March 2025, wherein the latter would pay US$250 million to the former over ten years for the provision of licenses and technical know-how to local companies. However, three non-government organizations have alleged that there was financial misconduct relating to the agreement, with the Malaysian Anti-Corruption Commission (MACC) seizing MYR 5 million or around US$1.27 million from a safehouse owned by a major political figure, according to Digitimes. Former Economy Minister Datuk Seri Rafizi Ramli, who spearheaded the negotiation with Arm, is also being linked to the investigation, although Ramli claims that the move is politically motivated.
Ramli resigned from his cabinet position in mid-2025 after being defeated in an internal election by the prime minister’s daughter for the ruling party's second-highest position. Since then, he has been a vocal critic of the prime minister and also publicly attacked the head of the MACC for abuse of power during a rally in Kuala Lumpur last month. Immediately after this, the former minister alleged that the MACC opened an investigation against him, framing it as a move to politically persecute him. Ramli even said that he will pursue legal action if the investigation does not result in a court case. Alongside scrutiny into Ramli, Digitimes reports that a former Army Chief has also been arrested by MACC.
The MACC investigation is putting Malaysia’s high-tech strategy at risk, especially as this could dampen investor confidence. Despite that, the Economy Ministry reiterated that the Arm deal was a Cabinet policy decision, and that it will move forward despite the investigation. In fact, two companies have reportedly received access to Arm IP, and local chip design capacity will continue growing under the government’s plan. Still, it intends to cooperate with the MACC and provide documents and statements, as needed.
Malaysia is taking advantage of the falling out between the U.S. And China by building up its own semiconductor industry, with many U.S. Tech companies that previously manufactured in China moving to the Malaysian peninsula. Because of this, the government is pushing its local industries to level up towards high-value manufacturing, and the Arm deal is designed to help it achieve that. It seems, though, that corruption and politics could affect its progress towards its goal.
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