Sarawak Bets Its Rivers Can Power a Semiconductor Industry

Sarawak wants to convert its river network into electricity and industrial cooling water for semiconductor fabs and advanced manufacturing, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg announced on Oct 24.

Speaking at the National-Level World Rivers Day Celebration 2026 at Dataran Tun Tuanku Bujang in Sibu, broadcast live on Ukas Channel, the Premier framed water as the binding constraint on future technology. He did not name a single fab, investor, capacity figure or timeline. That absence matters.

What did the Premier actually promise?

Abang Johari said artificial intelligence semiconductors and advanced manufacturing require substantial energy and water, particularly for cooling. His argument was direct.

"New technologies depend on semiconductors. AI semiconductors and advanced manufacturing depend on water and energy," he said.

He elaborated on the physics: "Without water, these technologies cannot operate because they generate heat. They need water to cool the technology used in high-tech industries."

The claim is technically sound. Leading-edge fabs consume millions of gallons of ultrapure water daily, and AI data centers carry heavy cooling loads. What the Premier did not address is the gap between raw river water and the ultrapure water a fab requires. Treatment capacity, not rainfall, sets the limit.

How much hydropower does Sarawak actually have?

Sarawak's position rests on confirmed assets. The state already operates major hydropower facilities along Batang Rajang: Bakun, Baleh and Murum. Bakun alone is one of Southeast Asia's largest hydroelectric dams.

"God has blessed us with many rivers and abundant water. More water means more power," Abang Johari said.

The Premier said Sarawak could contribute to the ASEAN Power Grid through its hydropower resources while supporting high-value industries within the region. No megawatt figures, export volumes or grid connection schedules accompanied that statement. The ASEAN Power Grid remains a plan with phased bilateral interconnections, not a functioning single market.

Why the middle-income trap argument?

Abang Johari placed the industrial pitch in a blunt economic frame. Malaysia remains stuck in the middle-income trap, he argued, partly because it consumes technology rather than creating and producing it.

He cited South Korea as the model: a country that advanced by developing its own technologies and building globally competitive industries. Sarawak, he said, wants to move in the same direction by developing semiconductor manufacturing capabilities for the global market.

The comparison invites skepticism. South Korea built its semiconductor industry over four decades with sustained state financing, protected domestic champions and a deep engineering talent pipeline. Sarawak has announced direction, not mechanism. No funding amounts, process-node targets, workforce plans or partner companies appeared in the speech.

What about environmental safeguards?

The Premier stressed that rivers must be protected and their water treated appropriately to serve both green energy production and industrial cooling. His wording tied the two uses together.

"With Sarawak's many rivers, we can keep them clean and treat the water for green energy, as well as for cooling systems in advanced manufacturing," he said.

He positioned clean energy development as essential to support industrialisation while addressing global concerns over carbon emissions and climate change. Sarawak's development under the Post-Covid Development Strategy 2030, he added, must balance economic growth with environmental sustainability. Hydropower reservoirs on the Rajang have already drawn past criticism over displacement and ecological impact, a tension the speech did not acknowledge.

What happens next?

Abang Johari said Sarawak would continue investing in technology and infrastructure so its natural resources can support long-term economic development. No investment figures were disclosed.

Deputy Prime Minister Datuk Amar Fadillah Yusof, Deputy Premier Datuk Amar Dr Sim Kui Hian, Tourism, Art and Culture Minister Dato Sri Tiong King Sing, Deputy Minister of Local Government Datuk Michael Tiang, PETRA secretary general Dato Sri Mad Zaidi Mohd Karli, DID Malaysia director general Datuk Ir Mohamad Radzi Abdul Talib and DID Sarawak director Datu Ir Ahamd Denny Ahmad Fauzi attended the event. The senior federal presence signals political backing for the strategy.

For now, Sarawak's semiconductor ambition rests on three existing dams, abundant river water and the PCDS 2030 framework. Whether any fab commits to the Rajang basin will depend on whether treatment infrastructure, grid reliability and talent supply follow the rhetoric.