Potential for growth in E&E industry

Strong ties: Wong (right) giving a token of appreciation to Stoltz (centre) and vice president & managing director, Penang Operations & Interim Country Manager of Motorola Solutions Malaysia Solomon Lorthu during the forum at MIDA Sentral, Kuala Lumpur. — FAIHAN GHANI/The Star

KUALA LUMPUR: Malaysia has the potential to play a key role in the future global semiconductor industry, say industry experts.

Local and foreign experts attending the Malaysia National E&E (Electrical and Electronics) Forum 2022 here yesterday agreed that a combined focus on E&E would be an important catalyst for Malaysia’s future growth towards becoming a high-income and high-technology nation.

Malaysian Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said the recently implemented Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would provide local industry with greater opportunities to grow.

“The elimination of tariffs between countries under the CPTPP will increase Malaysia’s overall export competitiveness with countries that do not have any FTA with us yet, such as Canada, Mexico and Peru.

“This is especially fruitful for the semiconductor sector by providing companies with wider sourcing channels and the possibility of lower raw import material costs.

“This will also heavily benefit the growth of E&E small and medium enterprises (SMEs) and companies that do not already enjoy customs duty exemptions, which will lead to an overall increase in investments into the local market,” he said in his opening address at the forum.

Malaysian Investment Development Authority (Mida) deputy chief executive officer S. Sivasuriyamoorthy said the local semiconductor manufacturing sector was also expected to continue its rapid growth so long as the government’s holistic approach to the E&E ecosystem is continued.

“The focus on accelerating the adoption and adaptation of advanced factory automation and digitalisation to transition existing operations into ‘smart factories’ has enhanced the flexibility of the industry to adapt to unforeseen challenges like the US-China trade tensions,” he said.

STMicroelectronics Asia-Pacific executive vice-president for public affairs (Asia) Bertrand Stoltz said current promising global market conditions would continue to provide ample opportunities for Malaysia to expand its share of the global semiconductor market.

“The rising demand and use of renewable energy worldwide means that there will be greater demand for vital E&E components that these technologies use as more people become environmentally conscious.

“People will be more inclined to purchase newer power-saving appliances to replace their legacy appliances that lack power-saving or modern features that are expected by most modern consumers.

“The automotive industry will also drive up demand for semiconductors as vehicle production levels recover from the pandemic slowdown.

“This is further enhanced by the increasing demand and development of new environmentally friendly vehicles that require far more semiconductors due to having more features that require additional processing power,” said Stoltz, who is also the STMicroelectronics Singapore managing director.

Semiconductor Industry Association (SIA) vice-president for global policy Jimmy Goodrich said Malaysia’s semiconductor workers would also be in high demand due to the passing of the Chips and Science Act by the US government in August to boost domestic semiconductor research and development.

“There will be an increased demand for skilled workers from Malaysia and other countries as US companies look for experts to help revitalise their semiconductor industry.

“Malaysia should be wary of the possibility of losing a large portion of its skilled semiconductor workers to the US if Malaysia wants to continue its ambition of being a major force in the global semiconductor market,” he said.

Deloitte Consulting (SEA) Sdn Bhd executive director for consulting Jan Thomas Nicholas said Malaysia had a significant amount of untapped potential workforce that could help meet the labour needs of the future semiconductor market.

“Malaysia has a lot of really smart and entrepreneurial people in both the rural and urban areas, and spreading awareness about the possible future benefits of being a chip engineer would spur most of them to join the industry.

“They can play a pivotal role in advancing not just the Malaysian semiconductor industry but potentially the global market as a whole if they are given the chance,” he said.

The forum, held physically at MIDA Sentral and broadcast online, attracted over 300 participants, represented by manufacturers, service providers, and potential investors.

It was divided into two panel discussions, the first on “CHIPS and Science Act and US Restrictions” with panellists who included Goodrich, Jan Thomas, and managing director and head of Taiwan research at Credit Suisse and Asia semiconductors Randy Abrams.

The second panel discussion revolved around the topic of “Sustainability in the E&E Industry” with the panellists including Western Digital Batu Kawan Manufacturing Operations vice-president and general manager Vishwanath Ramaswamy; Ernst and Young Consulting climate change and sustainability services senior manager Ibrahim Ariffin; SEMI sustainability programmes vice-president Dr Mousumi Bhat; and Dell Technologies Delivery Centre of Excellence, global sales learning and development senior adviser Chan Kim Beng.

Wong Shou Ning, a local business radio presenter, moderated both sessions.

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