Industries in Malaysia
Electrical and Electronics Industry
The electrical & electronics (E&E) industry is the leading sector in Malaysia's manufacturing sector, contributing significantly to the country's manufacturing output (26.94 per cent), exports (48.7 per cent) and employment (32.5 per cent).
In 2010, the gross output of the industry totaled RM158.7 billion (US$50.94 billion), exports amounted to RM235.5 billion (US$75.7 billion) and created employment opportunities for 325,696 people. The major export destinations are USA, China and Singapore while the major import destinations are Taiwan, USA and South Korea.
Over the years, Malaysia's E&E industry has developed significant capabilities and skills for the manufacture of a wide range of semiconductor devices including photovoltaic cells and modules, high-end consumer electronics, and information and communication technology (ICT) products.
The E&E manufacturers in the country have continued to move-up the value chain to produce higher value-added products. These include intensification of research and development efforts and outsource non-core activities domestically.
The E&E industry in Malaysia can be categorised into four sub-sectors:
a) Consumer Electronics
This sub-sector includes the manufacture of LED television receivers, audio visual products such as blu-ray disc players/recorders, digital home theater systems, mini disc, electronics games consoles and digital cameras.
The sector is represented by many renowned Japanese and Korean companies which have contributed significantly towards the rapid growth of the sector.
The leading companies are now undertaking R&D activities in the country to support their global and Asian markets. Exports of consumer electronic products in 2011 amounted to RM22.36 billion (USD8.7 billion).
b) Electronic Components
Products/activities which fall under this sub-sector include semiconductor devices, passive components, printed circuits and other components such as media, substrates and connectors. The electronic components are the most important sub-sector and they account for 36 per cent of the total investments approved in the electronics sector in 2011.
The sub-sector is mainly dominated by the semiconductor players especially MNCs, mainly undertaking the assembly and test activities. However, the development of the semiconductor cluster has shown a gradual increase over the years. More companies are expanding the research, design and development activities in their operations with less emphasis in the manufacturing of low end products. The increase in demand for the miniaturisation and high performance devices for mobile, automotive and green applications has further stimulated the growth of outsourcing activity in the semiconductor industry.
Semiconductor products constituted of export value RM107 billion (US$34.4 billion). It contributes 93.4 per cent of the total export of electronic components or 50.8 per cent of the total electronics export for 2011.
c) Industrial Electronics
This sub-sector consists of multimedia and information technology products such as computers, computer peripherals, telecommunication products and office equipment. The Industrial electronics sub-sector accounted for 6 per cent of the total investment approved in the electronics sector in 2011.
In 2011, the majority of the investments approved amounting to RM2.6 billion were from Electronic Manufacturing Services (EMS) companies producing low volume high mix products for various applications such as medical, aerospace, oil and gas and telecommunication.
The major electrical products produced under this sub-sector are lightings, solar related products and household appliances such as air-conditioners, refrigerators, washing machines and vacuum cleaners. In 2011, Investments in the sub-sector amounted to RM9.7billion, of which 91.4% is dominated by foreign investments while domestic investments accounted for 8.6% of the total approved investments in 2011. With exception to the solar industry, most of the investments in the electrical sub0sector were from the domestic sources, especially in the production of household appliances and electrical components.
Malaysia is home to many of the largest and renowned solar players such as First Solar and AUO-Sunpower. The presence of these MNCs has contributed to the development of various products under the solar cluster.
The growing awareness of the importance of the green technology including renewable energy has led to the introduction of the LED roadmap by the Malaysian Government. This has spurred the growth of the LED industry and opens up new opportunities for both local and foreign investors in developing Malaysia’s LED industry.
The introduction of Feed-in-Tariff (FiT) in 2011 has encouraged the usage of renewable energy in the country. This mechanism allows electricity produced from indigenous renewable energy resources to be sold to power utilities at a fixed premium price for a specific duration.
Note: exchange rate
1 USD = 3.1115 MYR @ 7th September 2011
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