PENANG: MALAYSIA’s first free trade zone in Bayan Lepas, here, continues to serve as the heart of the electrical and electronics (E&E) sector, while more manufacturing and development activities have sprouted in Seberang Perai.
As the stream of the jets carrying computer components and finished technology gizmos trail the blue skies, the role played by the state’s foreign and local investors in the sector has come a long way from the days of only making semiconductor chips.
From labour-intensive operations, semi-automation was introduced and this was followed by automation.
Many careers in the sector took off as smoothly as the jets carrying the precious cargo, and the Malaysians hired by these multinational corporations took on global roles and made a name for themselves.
“There was a lot to learn and it was up to you if you wanted to take up the challenge as technology was changing faster each year.
“Over the years, more and more responsibilities were transferred from the home bases of these companies to Penang,” recalled the Malaysian American Electronics Industries chairman Datuk Wong Siew Hai, whose career path in Malaysia’s “Silicon Island” is a tale of how far Penang has evolved over more than four decades.
“The state has evolved from merely a site for assembly operations to test, and then design business, logistics, shared services, and so on,” said Wong, who worked for the world’s biggest chipmaker Intel and also Dell.
“Today,” he noted, “there are more diversifications from the semiconductor industry like storage of hard disk drives, light emitting diodes (LED), solar, medical devices, automotive, aerospace and avionics, to name a few.”
Growing alongside big names who made Penang their offshore base like Intel, AMD, Dell, Motorola, Fairchild, Agilent Technologies, Seagate, Clarion, Osram, Robert Bosch and Flextronics were local small and medium firms that grew to support the foreign giants and did well for themselves. Many found their way to listings on Bursa Malaysia and other bourses.
Describing his career as one which has been rewarding yet challenging, Wong shared his tale of growing with former employer Intel, whose presence in Penang and neighbouring Kedah is still felt.
“I started working at Intel in January 1976 as a quality assurance (QA) engineer,” said Kedah-born Wong.
“In a couple of years, I was promoted to QA manager after which I served in various managerial roles at Intel.”
He was instrumental in starting the company’s Penang Design Centre for microelectronics in 1991 and two years later, took a team to Arizona to transfer Intel’s 8-bit micro-controller business from the United States to the island. It was also the first offshore profit and loss business unit outside of the US.
Wong then became the managing director for Intel Malaysia and later a vice-president for the company.
His last position at Intel prior to retirement was to assume responsibility for the chipmaker’s worldwide assembly and test manufacturing operations.
Statistics from the Malaysian Investment Development Authority dated August 19, showed that Penang ranked third for approved investments in the manufacturing sector in the first half of this year — raking in RM4.3 billion. This compared with RM3.21 billion recorded during the corresponding period previously.
Johor topped the list with RM27 billion of approved investments for the sector, from RM15.59 billion in the corresponding period last year.
Malacca came in second with RM6.2 billion of manufacturing investments approved, up from RM0.78 billion in the first six months of the previous year.
“Penang’s E&E sector,” noted Wong, “will continue to grow while companies with more labour-intensive operations will find it more difficult to compete.
“Those unable to compete will need to move out and more value-added operations will take its place.”
While Penang’s manufacturing excellence cannot be underscored, Wong stresses that there was room to grow, notably in design and development (D&D).
“The limiting factor lies in talent, especially with experienced engineers,” he lamented.
“If we have more quantity and higher quality engineers, then the D&D industry would have grown faster.”
Asked on how Penang fares when placed alongside countries like Taiwan, where its small and medium industries have played a crucial role in the development of its technology sector, Wong said: “We have some successful local companies that have gone global, but they are not as big or successful when compared with similar firms in Taiwan, South Korea or Japan.
“We have a strong team of small and medium enterprises (SMEs) supporting the multinationals but there is still a lot more to be done to compete with the three countries mentioned.”
Penang, noted Wong, continued to work on improvements in making it attractive for its investors.
The question of talent, however, still begged an answer, he said, pointing to the dependency on foreign workers.
“What is the strategy for foreign workers? It is one question that requires a response as at the end of the day, companies must be able to compete globally with the best people and costs on all fronts of business.
“For foreign investors to come to Penang or Malaysia, they look at every criteria, not only in the Penang context, but from a view of how they can compete best globally.
“With 40 over years of manufacturing excellence and a well-developed pool of small and medium enterprises, Penang still has the advantage over some other investment locations,” he added.
