KUALA LUMPUR, Sept 15 — Malaysian Investment Development Authority (MIDA) wants electrical and electronics (E&E) companies to move up the value chain, especially in narrowing the “ecosystem gaps” in areas such as integrated circuits (IC) design, advanced IC packaging, engineering and testing services as well as electronic manufacturing services.
Chief executive officer Arham Abdul Rahman said there is a need for industry players to leverage on design and research and development (R&D) activities as part of their strategy to move up the value chain.
“This sustainable effort could reduce dependency on imported technologies while creating our very own Malaysian niche,” he said in his keynote address at a webinar today titled ‘Seizing the Next Wave of E&E Investment into Malaysia’.
Among the panellists at the webinar were Texas Instruments Malaysia Sdn Bhd country managing director S Yogannaidu, Infineon Technologies Kulim Sdn Bhd senior-vice president and managing director Ng Kok Tiong and Micron Technology Inc global assembly and test senior vice-president Gursharan Singh.
The webinar was moderated by First Solar Malaysia Sdn Bhd vice-president and managing director of manufacturing operations Datuk P’ng Soo Hong.
Arham highlighted R&D activities as essential tools for diversification and advancement.
“MIDA is very keen to have E&E companies enhancing their digital network by using the Lighthouse programme,” he said, referring to industry players that have successfully implemented Smart Manufacturing Technology, thus achieving significant financial and operational benefits.
Arham said the Lighthouse programme acted as beacons to guide the supply chain and domestic companies to apply technologies like artificial intelligence, additive manufacturing and advanced analytics to overcome challenges in the existing production system.
He noted that the unpredictable onset of COVID-19 and the subsequent movement restrictions on people, goods, and technology suppliers have affected companies across the industries, forcing them to relook at their current business practices and adopt agile and remote production systems using Industry 4.0 technology to avoid further disruptions.
Malaysia is a major global manufacturing hub for the E&E industry, producing 13 per cent of the global back-end semiconductor output that accounted for 40 per cent of Malaysian exports.
“In the first half of 2021, the E&E sector recorded RM47.1 billion in approved investments, a surge of 843 per cent from the corresponding period last year,” Arham said, noting that foreign investments led the approved investments in the industry, making up nearly 98 per cent or RM46 billion.
“These approved projects are anticipated to generate over 9,700 new jobs, including skill positions for engineers, specialised quality controllers, and highly skilled technicians,” he added.
Arham said Malaysia needs to be at the forefront in seizing opportunities in the E&E sector, particularly the semiconductor segment, as more global companies seek to capitalise on Malaysia to develop new technologies, venture into additional products, and ramp up production capacities to meet demand.
Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said Malaysia is now a critical hub in the semiconductor global supply chain as approximately seven per cent of the total global semiconductor trade flows through Malaysia.
“Last year, Malaysia E&E exports was RM386 billion, accounting for 39.4 per cent of Malaysia’s total export. In the first six months of this year, E&E exports grew 28 per cent year over year.
“According to the world semiconductor trade statistics, the worldwide semiconductor market is expected to grow 25 per cent this year and 10 per cent next year to US$551 billion (US$1=RM4.16) and US$606 billion respectively,” he said.
The outlook for the sector continues to be very positive and Malaysia has a lot to offer in terms of its location and nearly 50 years of experience in the E&E industry, Wong said.
Texas Instruments Malaysia’s Yogannaidu said the government and industry players must seize the opportunity by improving Malaysia’s attractiveness as a global E&E investment destination given the long-term trend of semiconductor growth.
Infineon’s Ng said Malaysia has cost advantages and a supportive economic environment which continues to be very attractive for Infineon Technologies Kulim to expand its existing operations and R&D capabilities in new technologies.
“We are confident that our long-term presence will continue to position Malaysia in enhancing its global semiconductor supply chain hub,” he said