It's been a while, but last thing we heard from Malaysia was that they were quite happy with their small fleet of Hornets but purchased the Su-30MKM to supplement them rather than Super Hornets. This came down to finances, iirc a barter deal with a Russian investment bank to pay for the aircraft was preferred for the country at the time. Although the MiG-29 served Malaysia well in the air defense role, clearly it needs to be replaced sooner than later. Service life of third generation Russian jets is not great, and lately there have been reports about serviceability issues despite the remaining fleet of 10 considered to have been in pretty good shape lately compared to other MiG-29s. Since the Flanker deal Malaysia has been growing fast and it's no surprise that replacing the MiGs is favoured over an extensive overhaul which would only keep them in service for a about 5 years longer, rough estimate. And the biggest MiG-29 operator being Russia being a clear example of why you shouldn't keep them beyond their intended service life. If I'm correct, they are now 16 years old, (compare with 22-24 years for Russian examples) with the chief claiming they are out of life. With third generation Russian fighter generally considered a service life between 15-20 years or 4000 hrs, that sounds about right. However, did they fly 250 hrs per a/c per year? I believe that would be a first among MiG-29 operators. Overhauling them shouldn't be a problem, with India doing just that just around the corner.
I think it is the ageing tech, but more importantly bad press it has received in recent years, ever since the air force clarified the Flanker would not replace the MiGs, that now makes them call for (early) retirement next year. On the other hand, a replacement would not arrive before 2015 I estimate, so there's no question a replacement needs to be sought now. The Flankers, although bought for strike, will likely fill the air defense gap without a problem. Interestingly, it puts a small number of MiG-29 jets on the market (from a Moslim country, but admittedly one with its own agenda quite different from others) that's actually in decent shape. I wonder who will pick them up.
So moving on, Malaysia is on the market for a multi-role fighter, filling the air defense gap left by the MiG-29 but also the F-5, I guess that means point defense but potentially a secondary attack requirement too. The minister of defence has already stated that the Eurofighter is "admittedly the best fighter" and that it is expensive and needs to evaluated. It's somewhat of a surprise announcement as Malaysia has always been eyeing the Super Hornet ever since it gotten the Hornets. Super Hornet will be evaluated, but this announcement tells me that they looked at India's MMRCA competition, where it was dropped in favour of the Eurofighter and Rafale... and the Australian lease of the Super Hornet made it clear it's not cheap either.
Gripen and Su-35 were the other two being mentioned. Both are imho more interesting options, the Gripen being well suited to Malaysia's needs (especially if you've got 4th Generation Flankers for strike), affordable, and not new to the region (climate), further more Saab is the only one that can supply a full air defense package with the Erieye. I don't think Boeing can throw in a 737 AEW at the same price. But focusing on what gap it is filling, I suppose the Gripen alone will do.
The Su-35 providing some commonality with the Su-30MKM (despite coming from a different airframer), which could make the route of making the all-Russian Su-35 better by integrating the MKM's tech, while a future upgrade of the MKM could improve commonality with the Su-35 (engine, avionics).
Only mentioned by some aviation press, but not in the MOD release, Dassault is also interested and wants to put up their Rafale as option. Somehow I doubt it, I really don't see how they would win the contract as there's little to go on and being almost as expensive as the Eurofighter. With the Hornets and Flankers, it's clear both of them have an edge when it comes to support and training. Gripen's affordability compensates for its lack thereof And Eurofighter, well, three out of the four partner nations have surplus jets due to their commitments. I reckon it's the UK/BAE that will push it for Malaysia, and that would just make perfect sense with Malaysia's experience with the Hawks. Rafale no chance, why even throw it in.