KUALA LUMPUR, March 5 -- Malaysia has struck a US$250 million (RM1.1 billion) deal with UK-based Arm Holdings Plc to secure semiconductor design licenses and technology over the next decade to move the country's chip industry up the value chain.

Accordiing to Economy Minister Rafizi Ramli, the 10-year agreement aims to push Malaysia beyond its traditional role in chip assembly and testing, enabling local companies to design and develop their own semiconductors to compete in the global market.

"We have always wanted to move from the back-end - which is on testing and assembly - to the front-end," said he said in an interview with Bloomberg Television.

"The government has taken a radical approach" to work with Arm "with the perspective o...