Hurdles in Malaysia's chip dreams
Policies need reworking if the country were to move up the value chain, say industry chiefs.
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Editor’s note: Today’s brief is all about 📱 Malaysia’s semiconductor ambitions. I’ve pushed the story on 💰Ekuinas for this Saturday’s wrap. Today’s newsletter turned out chunky and I decided to keep it to a single topic. Enjoy.
Malaysia’s semiconductor industry has always been among the country’s prized jewels. This was even before foreign publications such as The Financial Times and The New York Times wrote about us being beneficiaries of the protracted trade war between China and the US.
Prime Minister Anwar Ibrahim’s government has also set up the National Semiconductor Strategic Taskforce to grow the semiconductor ecosystem and draw in strategic investments. Investment, Trade and Industry Minister Tengku Zafrul Aziz will chair the committee. A focus on electrics and electronics, particularly electric vehicles, gave impetus to the task force.
The semiconductor value chain is complex but we’re talking about a US$520 billion global industry that powers everything from televisions to smartphones. As for Malaysia, the semiconductor sector has been estimated to contribute 25% of the country’s GDP.
There are more than 200 companies – both local and foreign – across the country doing some kind of chip work. We even have a sole semiconductor firm in Kelantan by way of Japanese firm ROHM. Most companies, however, are based in Penang, particularly on the mainland.