LETTERS: The launch of the National Semiconductor Strategy by Prime Minister Datuk Seri Anwar Ibrahim at Semicon Southeast Asia should be applauded as it will lead to the nation's semiconductor industry rising to the top globally.
Malaysia's venture into the semiconductor industry began in the 1970s, driven by government initiatives aimed at diversifying the economy.
Over the decades, the semiconductor industry has stood on the forefront of economic transformation, poised to become a global powerhouse.
With its strong presence in chip assembly, packaging, testing and electronics manufacturing services (EMS), Malaysia has transformed itself from an agriculture-based economy in the 1970s, to a more diversified economic structure.
The electrical and electronics sector comprises about seven per cent of Malaysia's gross domestic product, with semiconductor devices and electronic integrated circuits making up a quarter of total exports, totalling RM387 billion in export value in 2022.
Malaysia is the world's sixth-largest semiconductor exporter, commanding 13 per cent of the global market for semiconductor packaging, assembly, and testing and supplying 20 per cent of the United States' annual semiconductor imports.
However, Vietnam and Indonesia have been positioning themselves to be the new hub for the semiconductor industry in this region by providing incentives for investors.
In this regard, the effort and policy announced by Anwar is the right move at the right time.
It should boost our semiconductor industry, allowing the country to recover its edge in the region.
More importantly, it is stated that the country has to move steps ahead by focusing on front-end process and high value-added activities, especially in research and development, IC design and wafer fabrication, and not just rely on back-end value chain that involve assembly and testing as well as EMS.
Based on a report by SEMI, the global industry association representing the electronics manufacturing and design supply chain, there were more than 70 fabrication plants globally, with eight in Southeast Asia.
By providing an allocation of RM25 billion, the nation will gain the upper hand to lure big boys, such as Taiwan Semiconductor and Samsung, to establish pure foundry fabrication plants in Malaysia.
On top of that, this initiative should be lauded as it focuses on domestic investment by targeting to establish 10 Malaysian companies in design and advanced packaging with revenues of between RM1 billion and RM4.7 billion, and 100 semiconductor-related companies with revenues of around RM1 billion.
It is certainly a good move to encourage local companies to improve their technologies and capabilities and be comparable with foreign multinational firms.
Malaysia also needs to invest more in science, technology, engineering and mathematics (Stem) education in its schools and universities, as well as technical and vocational training, to prepare a more robust talent pipeline.
So, training and upskilling 60,000 local engineers will mitigate the talent shortage in the semiconductor industry.
DR AHMAD SHAHIR ABDUL AZIZ
Senior manager,
InvestPerak,
Ipoh, Perak
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times