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Malaysia's Khazanah will direct more capital towards power grids and chip firms, says the chief of Malaysia's Khazanah in Davos

Malaysia's sovereign fund Khazanah Nasional Bhd plans to channel additional capital into strengthening the?power?system and supporting local semiconductor companies as AI drives next investment cycle.

Khazanah's Managing Director Amirul Feisal Wan Zahir stated in an interview during the World Economic Forum annual meeting in Davos that energy supply and grid reliability were central to competitiveness.

"What is needed for it to work well, is computing power. And what does computing power mean? Energy. Amirul Feisal said at the Global Markets Forum that this is when we should think about how to capture some of this growth.

Khazanah will instead concentrate on infrastructure, while global investors pour money into data centers.

He said that the AI infrastructure would be able to scale up only if it had cheap, reliable, and renewable power.

SEMICONDUCTORS, not DATA CENTRES

Amirul Feisal, Amirul's partner in the firm, said that the company was "looking at how we can fund some of the capital needs of our semiconductor players so they can move up the value-chain to advanced packaging".

Malaysia has developed industrial policies to strengthen its position in the global chip supply chains.

Anwar Ibrahim, the Prime Minister, said that in May 2024, the government plans to attract at minimum 500 billion ringgit (123.40 billion dollars) in semiconductor investments, supported by at lease $5.3 billion in fiscal incentives. It also stated that it intends to develop local capabilities in chip designing and advanced packaging.

Khazanah's portfolio includes Malaysia Aviation Group, the second largest lender in Malaysia, CIMB Group, and a number of other companies.

In 2024, its net asset value rose 22% from 84.8 billion to 103.6 billion Ringgit ($25.57billion) from a year ago.

Amirul Feisal stated that Khazanah expects its international portfolio share to gradually increase over time.

He said that the ringgit could strengthen if the U.S. Dollar was uncertain. However, he did not specify the level.

(source: Reuters)