Malaysia will pay Arm Holdings $250 million over 10 years to acquire the firm's chip design plans for local manufacturers, the government said on Wednesday as it looks to produce its own chips within the next decade amid an AI boom.

The country wants to scale up the tech value chain beyond manufacturing to acquire advanced semiconductor intellectual property.

Malaysia will pay Arm Holdings $250 million over 10 years to acquire the firm's chip design plans for local manufacturers, the economy minister told Bloomberg TV on Wednesday. The Southeast Asian nation plans to produce its own graphics processing unit chips in the next five to 10 years as demand for artificial intelligence and data centres grows.

Malaysia hopes its Arm deal will help foster 10 local chip companies with annual revenue between $1.5 billion to $2 billion each.

British chip giant Arm Holdings signed an agreement with Malaysia on Wednesday to bolster the Southeast Asian country's efforts to produce high-end semiconductors amid the US-China tech trade war. "Malaysia is laying the red carpet and showing the world that they are serious in this tech war,