Semicon industry urges govt to let factories in EMCO areas operate

  • Economy
  • Saturday, 03 Jul 2021

MSIA president Datuk Seri Wong Siew Hai: “This EMCO directive does not approve the operations of the E&E factories which is classified as an essential industry.”

KUALA LUMPUR: The Malaysia Semiconductor Industry Association (MSIA) is appealing to the government to allow the electrical and electronics (E&E) factories in the enhanced movement control order (EMCO) areas to operate.

MSIA president Datuk Seri Wong Siew Hai urged the authorities to take into consideration these exemplary companies who have maintained the highest standard of standard operating procedures (SOP) compliance.

In a point-by-point appeal, Wong said MSIA member companies have done their level best to ensure strict compliance of SOPs; conduct regular testing on employees; quarantine affected employees; comply with the legal requirements of Act 446; and set up on-site PPV to expedite vaccination.

In a statement, he said these factories had also extended great effort to assist the country to break the chain by regular testing.

Expressing great concern about the EMCO, which came into effect on Saturday until July 16 in Selangor districts and several localities in Kuala Lumpur, Wong said:

“This EMCO directive does not approve the operations of the E&E factories which is classified as an essential industry.”

Malaysia is a key player in the global semiconductor trade, he said, adding that about 7% of total global semiconductor trade flows through Malaysia.

In addition, Malaysia is a major part of the global electronics supply chain with E&E exports at 39% (RM386bil) of Malaysia’s total export and contributed 6.8% of national GDP and employed 575, 000 workers in 2020.

“The disruption of the supply chain will result in the inability of global companies to assemble and produce critical infrastructure, medical equipment like ventilators, medical devices, and other essential products.

“Given that some of the key chip makers are located in the EMCO areas, any disruption in production would not only reverse the positive spillover the firms gained from global chip shortages but also put Malaysia in the negative spotlight for exacerbating the global chip shortages.

“In addition, two biggest burn-in service suppliers that provide support to other factories in Malaysia, are located in KL. The shutdown will have a major impact to the E&E industry in Malaysia, ” he said.

Wong said the shutdown could potentially affect overseas corporate investment intentions and they would likely permanently transfer their products to other locations outside of Malaysia.

“The many SMEs supporting the MNCs and LLCs will also be severely impacted. Customers may also look for suppliers elsewhere. All these factors will pose risks of losing the E&E ecosystem which has been organically developed for the past 50 years, ” he said.

He also pointed over the last three weeks, the authorities had conducted 14 surprise audits on MSIA member companies and all of them were found to be fully compliant with the SOPs.

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