KUALA LUMPUR, 26 November 2025 – The Malaysian government has approved approximately RM150 million in investments to accelerate adoption of smart technology and automation under the Industry4WRD scheme, aimed at transforming local manufacturing and supporting competitiveness among micro, small and medium enterprises (MSMEs).
The funds, channelled through Malaysian Investment Development Authority (MIDA), form part of a broader push by the Ministry of Investment, Trade and Industry to encourage firms to embrace high-value, efficient technologies, such as AI, automation and smart manufacturing.
According to Tengku Datuk Seri Zafrul Tengku Abdul Aziz, the approved investment under Industry4WRD supports automation upgrades, grants and readiness-assessment programmes. He said that since the national industrial policy rollout, around 1,200 companies have undergone readiness assessments.
Also highlighted was support through the Smart Automation Grant, which has benefitted about 120 firms, with nearly RM100 million already disbursed to support automation and modernisation.
What This Means for Malaysian Industry & Investors
- Boost for MSMEs – The RM150 million allocation aims to help smaller manufacturers upgrade equipment, adopt digital systems and improve productivity, a key enabler of long-term competitiveness as global supply-chain demands evolve.
- Tech modernisation push – By supporting automation and smart manufacturing, Malaysia is signalling a shift from labour-intensive to tech-driven production, potentially attracting more foreign and domestic investment in higher-tech manufacturing and services.
- AI and semiconductor ambitions – The minister also noted efforts to expand capabilities beyond assembly into higher-value segments like IC design and packaging, though he flagged a shortage of skilled specialists remains a key challenge.
- Talent and skills imperative – To support the technology shift, Malaysia is expanding university-industry collaboration and considering incentives to attract and retain technical talent, including allowing foreign engineering graduates to stay and work locally post-graduation.
Challenges & Watch-Points
- Skills gap – As the minister acknowledged, there is a shortage of specialist engineers and talent capable of supporting automation and advanced manufacturing. Scaling up human capital remains a major task.
- Global tech competition & supply-chain tensions – Given global dynamics around AI hardware, chip supply and geopolitics, implementation may be sensitive to external pressures. The government emphasised giving firms the option between US and China-made chips to ensure flexibility.
- Execution & uptake – The success of the initiative hinges on how well MSMEs and larger firms adopt and integrate new technologies, not just on grant funding.
