KUALA LUMPUR, May 28 (Reuters) - Malaysia is targeting

at least 500 billion ringgit ($107 billion) in investment for

its semiconductor industry, Prime Minister Anwar Ibrahim said on

Tuesday, as the Southeast Asian country looks to position itself

as a global manufacturing hub.

Malaysia is a major player in the semiconductor industry,

accounting for 13% of global testing and packaging. It has

attracted multibillion-dollar investments from leading firms in

recent years, including Intel ( INTC ) and Infineon.

Anwar said the investment being sought would be for

integrated circuit design, advanced packaging and manufacturing

equipment for semiconductor chips.

Malaysia also wants to establish at least 10 local companies

in design and advanced packaging for semiconductor chips, with

revenues between $210 million to $1 billion, Anwar said in a

speech at an industry event.

The Southeast Asian country will allocate $5.3 billion in

fiscal support to meet these targets, he added, saying further

details would be announced later.

"We have a strong capacity to diversify and move higher in

the value chain ... to move towards even more high-end

manufacturing, semiconductor design and advanced packaging,"

Anwar said.

He did not specify a timeline for the targets to be met.

On April 22, Anwar said Malaysia planned to build Southeast

Asia's largest integrated circuit design park and would offer

incentives including tax breaks, subsidies and visa exemption

fees to attract global tech companies and investors.

He said the proposed integrated circuit design park was part

of Malaysia's efforts to move beyond backend chip assembly and

testing and into high-value, front-end design work.

Malaysia is seen as well placed to grab further business in

the semiconductor sector, as Chinese chip firms diversify

outside of China for assembling needs.

China's Xfusion, a former Huawei unit, said last

September it would partner with Malaysia's NationGate

to manufacture GPU servers - servers designed for data centres

and which are used in artificial intelligence (AI) and

high-performance computing.

Shanghai-based StarFive is also building a design centre in

Malaysia's Penang state, while chip packaging and testing firm

TongFu Microelectronics said in 2022 it would expand

its Malaysia facility - a venture with U.S. chipmaker AMD

.

Germany's Infineon said last August it would invest 5

billion euros ($5.4 billion) to expand its power chip plant in

Malaysia, while U.S. chipmaker Intel ( INTC ) announced in 2021 it would

build a $7 billion advanced chip packaging plant in the country.

($1 = 4.6910 ringgit)

($1 = 0.9200 euros)