Local tech firms urged to focus on innovation

Pua: I tried to do here, but I failed because of the mindset of young men who are not hungry to earn money.

KUALA LUMPUR: Pendrive inventor, Datuk KS Pua said Malaysian technology companies must focus on innovation to move up the value chain.

The founder of Taiwan-based Phison Electronics Corp said there is an urgent need for Malaysian companies to engage in higher value added activities in designing of integrated circuit (IC) and wafer fabrication.

To encourage Malaysian companies to invest in high-end technology, Malaysian-born Pua suggested the government to use its allocated budget for the IT industry to give opportunities to hi-tech companies in the public sector.

He said hi-tech investments in solid-state drive (SSD) technology would be the right strategy for Malaysia to move up the value chain,

Under Budget 2019, the government allocated more than RM5bil to propel industries in Malaysia in the wake of the Fourth Industrial Revolution.

“For a start, a hi-tech company could be given contracts in the government sector to install SSD technology in the PCs to improve work efficiencies for government officials,” he said.

SSD technology, which provides faster storage and delivers information in real time, has a wide use of applications in devices including smartphones, tablets, thumb drives, computer games, digital camera, laptops and digital music players.

“The would also be beneficial for the hi-tech company to sustain its operations in Malaysia as the country has a relatively a smaller domestic market,” he said.

With this strategy, Pua pointed out that the government can provide programmes for hi-tech companies to train Malaysian graduates which is crucially needed to produce local technology and create a “self supply ecosystem.”

“What Malaysian engineers need is training to produce their own technology and the only way you can do that is bring in hi-tech companies who train graduates via the government programmes and build the ecosystem,” he added.

Malaysia’s semi-conductor industry has been striving up to move the value chain for a long time. Major efforts by the government have been embarked in the past but little significant progress has been achieved.

As a result, today the majority of Malaysia’s semiconductor producers still remain involved in the back end, from outsourced assembly and testing to manufacturing IC parts, printed circuit boards, sensors and precision tools.

Moving up into the high-end technology to become front-end manufacturers, such as wafer fabrication or IC design, has remained to a large extent, an unfulfilled dream and that is not without trying.

Pua himself had set up a 1,800-sq ft research and development (R&D) centre in 2012 in Penang.

Unfortunately, that project did not go according to the plan. One main reason, pointed out Pua, is the lack of passion among Malaysian engineers, as well as lower cost performance, which is an unfavourable proxy of the cost efficiency of the work completed.

“I tried to do here, but I failed because of the mindset of young men who are not hungry to earn money,” he said.

Despite the closure of operations in Penang, Pua looks forward to opportunities in his home country to train Malaysian graduates and create an eco-system for the semi conductor industry.

His company, Taiwan-listed Phison Electronics Corp posted a revenue of RM5.52bil in 2017 and is one of the leading producers of NAND memory circuits in the world, making it to Bloomberg’s Tech 100 list of top performing companies.

In 2019, Pua targets to export 50 million pieces of SSD technology compared to 36 million pieces in 2018 due to an increase in market share from US, Taiwan and Korea.


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