Prime Minister Datuk Seri Anwar Ibrahim today opened the first phase of Infineon Technologies AG’s new power fabrication plant in Malaysia, which is set to become the world’s largest and most competitive 200-millimeter silicon carbide (SiC) power semiconductor plant.

Its chief exec officer Jochen Hanebeck said the first phase of its Kulim 3 plant in the Kulim High-Tech Park (KHTP), is part of the total five billion Euros (RM25 billion) investment in the next five years here in a second phase of its construction of module three, which was announced last year. 

The first phase of the fabrication plant, with an investment value of two billion euros (RM9.8 billion), will focus on the production of SiC power semiconductors and will include gallium nitride (GaN) epitaxy.

“SiC semiconductors increase efficiency in electric vehicles, fast charging stations, and trains as well as renewable energy systems and Al data centres. 

“Nine hundred high-value jobs are already created in the first phasem” he added.

The second phase, with an investment of up to five billion euros, will create the world’s largest and most efficient 200-millimeter SiC power fabrication plant. Overall, up to 4,000 jobs will be created by the project.

“Our technology increases the energy efficiency of ubiquitous applications such as electric cars, solar and wind power systems, and Al data centres. We are therefore investing in the largest and most efficient high-tech SiC production facility in Malaysia, backed by strong customer commitments,” he said.

Hanebeck said the demand for semiconductors will constantly rise, and the investment in Kulim is highly attractive to Infineon’s customers, who back the company with their prepayments, increasing the resilience of the supply chain for critical components needed for the green transition.

Infineon started its operations in Malaysia in Melaka in 1973 and in 2006, the company opened Asia’s first front end fabrication plant in Kulim. 

Currently, Infineon employs more than 16,000 highly skilled people in Malaysia.

Source: NST

PM opens first phase of Infineon’s world’s largest 200-mm SiC power semiconductor plant

United States-based Enovix Corporation, which today inaugurated its first high-volume battery manufacturing facility (Fab2) in Malaysia, plans to invest a total of US$1.2 billion (RM5.8 billion) in the country over the next 15 years.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the state-of-the-art facility is a huge step for Malaysia in the global supply chain for advanced battery technologies, highlighting the country’s conducive investment landscape.

“It also fulfils our objective to attract the right high-tech industries to enhance the nation’s economic complexity, as outlined in the New Industrial Master Plan (NIMP) 2030.

“We welcome this new facility, which is a significant milestone for Enovix, and strongly supports our NIMP’s goals by fostering innovation, creating high-value jobs, and driving sustainable growth, while increasingly positioning Malaysia a global hub for cutting-edge technology,” he said in a statement issued jointly by the Malaysian Investment Development Authority (Mida), Invest-in-Penang Bhd and Enovix today.

Penang Deputy Chief Minister II Jagdeep Singh Deo said the state is honoured to be selected to house this facility which will bring positive technological and economic spillovers for not only Penang but the peninsula’s northern region.

“Today’s opening ceremony for the establishment of Enovix’s first high-volume manufacturing facility in Malaysia signifies the beginning of an exciting chapter for the company,” he said.

Mida chief executive officer Sikh Shamsul Ibrahim Sikh Abdul Majid said that Enovix’s significant investment in Malaysia will create jobs and enhance the workforce’s technological capabilities.

“Mida is proud to support Enovix in its mission to revolutionise battery technology, and we believe that its cutting-edge expertise will have a multiplier effect on our local ecosystem.

“As a partner, we’re committed to providing Enovix with the support and facilitation it needs to succeed, and we’re confident that its presence will have a positive impact on the nation’s economy and rakyat. We’re looking forward to working closely with Enovix to achieve its goals and make a difference in the industry,” he added.

Meanwhile, Enovix chief operating officer Datuk Ajay Marathe said Fab2 showcases the company’s advanced manufacturing process of cutting-edge batteries that it believes will usher in a new era of products for leading customers.

“We have been able to draw upon Malaysia’s deep pool of technical talent and are appreciative of the country’s business-friendly climate and close proximity to our customers and vendors,” he said.

Source: Bernama

US-based Enovix to invest RM5.8b in battery production facility in Malaysia

Malaysia is gaining more heft in the global supply chain as Infineon Technologies AG opens a major semiconductor manufacturing complex in the country, the South-East Asian nation’s leader said.

“We are now be able to receive and expand the technology. It shows Malaysia is now going up the ladder,” Prime Minister Anwar Ibrahim said at the opening ceremony of the first phase of Infineon’s €7bil (RM34.12bil) production site in the northern Malaysian district of Kulim on Aug 8.

Anwar highlighted the need for the local government and universities to help train the necessary talent to better accommodate Kuala Lumpur’s efforts to bulk up the local chip industry. This comes as major governments around the world are spending tens of billions to bolster the domestic production of semiconductors, a commodity that’s regarded as one of the most strategic goods for countries to develop emerging technologies.

Infineon chief executive officer Jochen Hanebeck said that the new Kulim campus progressed ahead of its original schedule and it will become the world’s largest silicon carbide power semiconductor manufacturing site once the second phase is also completed.

The new plant will focus on making power semiconductors that can help with decarbonisation in automotive, industrial and data centre fields. It is expected to create a total of 4,000 jobs eventually, according to Infineon.

Infineon’s investments in Malaysia highlight the South-East Asian nation’s potential to attract more tech investments at a time when major chip firms are seeking alternatives to China and Taiwan for manufacturing given increasing geopolitical uncertainties.

Malaysia has in past years emerged as a global hub for packaging and assembling, the final process before chips are ready for use in smartphones, data centres and electric vehicles. Major players including Intel Corp, ASE Technology Holding Co and Amkor Technology Inc have taken advantage of its skilled and lower-cost labour and proximity to major markets, especially as Covid and US-Chinese tensions disrupted the flow of chips globally.

In recent years however, China – eyeing packaging as a way to turbocharge locally made semiconductors – has emerged as a major assembly centre, while neighbouring countries including Singapore are also competing for multinational chip investment.

In response, Kuala Lumpur has implemented policies to boost its attractiveness, including US$5.6bil (RM24.95bil) of incentives and the setting up of a chip-design hub near the capital. It is also trying to draw more investments in wafer production, the front-end manufacturing considered to be the most valuable part of the chipmaking process, from the likes of Infineon and others to upgrade its capabilities.

Source: Bloomberg/The Star

Malaysia boasts of chip clout as Infineon opens €7bil site

German semiconductor giant Infineon Technologies AG will invest an additional €5 billion (RM30.1 billion) in constructing the world’s largest 200-millimetre silicon carbide power fabrication plant in Kedah.

The investment is for the second phase, on top of the original €2 billion for the first phase, according to a statement from the Malaysian Investment Development Authority (Mida). The two phases to expand its Kulim 3 fab building will together generate 1,500 jobs in Malaysia, the agency said. 

The plant located in Kulim High Tech Park is slated to be the largest 200-millimetre front-end manufacturing site for Infineon, focusing on automotive, green industrial power and power, and sensor systems.

According to Mida, Infineon transferred its silicon carbide and gallium nitride epitaxy production to Kulim Hi-Tech Park and expanded its manufacturing base. This would lead to an annual revenue potential of about €7 billion for the global semiconductor company by the end of the decade.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the construction of the world’s largest 200-millimetre silicon carbide power fabrication plant in Malaysia highlights the nation’s growing credibility as a regional hub for cutting-edge technology and innovation in the semiconductor space.    

“We warmly welcome long-term, committed partners like Infineon to, among others, enhance our economic complexity and push for net zero, as laid out in the New Industrial Master Plan 2030,” he added.  

Meanwhile, Mida chief executive officer Sikh Shamsul Ibrahim Sikh Abdul Majid said the expansion significantly strengthens Malaysia’s position in the global semiconductor supply chain.  

“As decarbonisation gains pace, this investment highlights the government’s dedication to green technologies and sustainable development, in line with the Green Investment Strategy (GIS),” Shamsul said.

Source: The Edge Malaysia

Infineon to invest additional RM30b to expand Kulim facility

Selangor has set up a 0.6 hectare semiconductor intergrated circuit (IC) design park here as part of Malaysia’s plans to move up the value chain in the semiconductor industry and “Made by Malaysia” ambitions.

“We are proud to officially launch the Malaysia Semiconductor IC Design Park, three months after its initial announcement at the KL20 Summit in April. This remarkable progress within such a short time frame highlights the swift execution and unwavering commitment of all stakeholders involved,” Selangor Information Technology & Digital Economy Corporation (Sidec) CEO Yong Kai Ping.

The Malaysia Semiconductor IC Design Park, set up in collaboration with the federal government, international semiconductor firms, and venture capitalists, aims to position Malaysia as a potential powerhouse in the global IC design industry.

The strategic initiative is designed to leverage Malaysia’s technological capabilities and resources, fostering innovation and advancing the country’s reputation in high-tech manufacturing and design.

The park site was meticulously chosen after an extensive evaluation process among the locations in Klang Valley.

The process considered key factors essential for semiconductor companies, such as size, power capacity, building status, office fittings, potential for future expansion, and public transport accessibility.

The park is designed to house more than 400 IC design engineers from five local, international, and JV IC design companies.

It includes anchor tenants Maistorage, Skyechip, Weeroc, AppAsia ChipsBank, SensoremTek Sdn Bhd and supported by ecosystem partners such as BlueChip VC, ARM Holdings, Cadence Design System, Synopsys, Siemens EDA and Keysight and Shenzhen Semiconductor Association.

Economy Minister Rafizi Ramli who was present at the launch, said the country needs to focus on developing its own semiconductor design capabilities rather than just relying on imported chips.

He outlined the federal government’s strategic direction to enhance the entire semiconductor ecosystem, covering both upstream and downstream sectors, with a particular emphasis on original design manufacturers (ODM).

“The country is currently receiving significant investment into data centres, but data centres also require ODM. Therefore, the government is looking at the entire ecosystem to complete it.”

“As this ecosystem takes place, data centers in Malaysia will begin to consider “Made by Malaysia” chips. That is the consideration the federal government is looking for,” he said at the launch.

Selangor Menteri Besar Datuk Seri Amirudin Shari said that Selangor does not aim to be a bit-part player in the semiconductor space, but intends to see semiconductors of the future with the label “Made in Malaysia, Designed in Selangor”.

“This should be our aim. This is our rallying call. This is crucial if we want to make Selangor Malaysia’s first 500 billion ringgit economy in the coming three years,” he said.

“The primary goal of the park is to promote original design manufacturing, encouraging local involvement in product design, prototyping, and production.”

“This project is not just about infrastructure; it is about creating opportunities and driving growth,” he added.

The park’s promoters are actively recruiting skilled candidates with degrees in electrical & electronics engineering, mechanical engineering, mechatronics, and computer science, offering highly competitive salaries.

Entry-level positions start between RM5,000 and RM6,000 for fresh graduates, while individuals with a master’s degree or extensive industry experience can earn up to RM7,000. 

Source: NST

Selangor launches 0.6ha chip design park as part of “Made by Malaysia” ambitions

The East Coast Economic Region Development Council (ECERDC) is poised to exceed its ambitious investment targets for the year, with officials projecting RM15 billion in realised investments by December 2024.

Speaking at Bernama TV’s talk show “The Nation: ECER – Closer Than You Think”, ECER development council chief operating officer Datuk Ragu Sampasivam said it had surpassed its initial RM10 billion target to date.

“We have key performance indicators [KPIs] every year, and two of our major KPIs are to commit and realise investments. We have surpassed our earlier target but we are not resting on our laurels.

“We are also coming up with plans and programmes that could help us reach our vision extending to 2030, under the ECER Master Plan (EMP) 3.0 and increase investment inflows into the East Coast,” he said.

Ragu said with these plans, the ECERDC is set to bolster its economic development and attract further investments, paving the way for sustained growth in the coming years.

Meanwhile, on the available specific investment opportunities within the ECER, he said the economic corridor is opening its doors to investors across multiple sectors, including industrial development, agriculture, infrastructure, tourism and sustainable development.

“Key industrial investments are centred around thematic parks, such as the Pekan Automotive Park, which hosts renowned brands like Mercedes. The Kerteh Biopolymer Park also stands out, focusing on downstream chemical products, benefitting from its strategic location near the Kerteh Integrated Petrochemical Complex operated by Petroliam Nasional Bhd.

“Tourism is another major focus, with new infrastructure like the East Coast Rail Line and the Central Spine Road, which is set to boost the region’s accessibility by 2026,” he added.

Ragu said the ECERDC is developing recreational vehicle (RV) parks to attract RV tourists, offering scenic routes from beaches to the Taman Negara National Park, which spans Kelantan, Terengganu, and Pahang.

Agriculture is another investment frontier, with the corridor positioning itself as the nation’s food basket. The recent Integrated Production and Resource (IPR) programmes also highlighted opportunities in food security and agricultural projects, he said.

“Additionally, the ECER is exploring carbon capture initiatives aimed at supporting hard-to-abate industries, emphasising sustainability,” he added.

Source: Bernama

ECERDC surpasses RM10 bil investment milestone, eyes RM15 bil by year-end

CIMB Securities Sdn Bhd expects the launch of the Malaysian Semiconductor IC Design Park (MSICP) in Selangor to be a positive catalyst for boosting the Malaysian integrated circuit (IC), or chip, design ecosystem.

CIMB Securities in its note today said it is a positive catalyst towards Malaysia meetings its goals of creating 10 Malaysian companies in design and advanced packaging with annual revenue between RM1 billion to US$1 billion, and 100 companies with annual revenue

of at least RM1 billion.

“Overall, we view the government’s initiative to capitalise on Malaysia’s strategic position as a neutral destination in the global semiconductor supply chain, amid ongoing trade tensions between the US and China, as a timely move to capture potential trade diversions,” CIMB Securities said.

The MSICP was officially launched yesterday at the Puchong

Financial Corporate Centre (PFCC).

The park’s objective is to facilitate the transition from a ‘Made in Malaysia’ to a ‘Made by Malaysia’ initiative, with a focus on high-value front-end IC design. Currently, Malaysia holds a 13 per cent global market share in the backend semiconductor chip assembly and test, and MSICP aims to elevate this position.

“The ongoing trade war between the US and China has created opportunities and reduced the entry barriers for smaller IC design companies to compete with major fabless players due to trade restrictions.”Hence, we see the government’s decision to promote IC design as a shot in the arm for domestic IC design players,” it said in a note today.

To recap, the government is allocating at least RM25 billion (US$5.3 billion) over the next five to ten years in financial support to cultivate local IC design and advanced packaging champions in its efforts to move up the value chain.

The MSICP was developed through a global collaboration between the federal and stategovernments, international semiconductor companies, and venture capitalists.

Overall, CIMB maintained an “Overweight” rating on the technology sector as it believes the sector is in the midst of a new upcycle with a potential valuation re-rating.

This is based on improving earnings visibility led by the proliferation of artificial intelligence (AI), acceleration in supply chain diversification, and RM25 billion fiscal injections by the government in the form of National Semiconductor Strategy.

The firm has picked Inari Amertron Bhd and Malaysian Pacific Industries Bhd (MPI) as its preferred stocks in the sector.

Source: NST

Selangor semiconductor chip design park a positive catalyst for boosting ecosystem – analyst

Selangor Menteri Besar Datuk Seri Amirudin Shari today said that the integrated circuit (IC) design park is not meant to compete with Penang’s semiconductor economy.

“Some of you may be wondering and asking the question: Why is Selangor attempting to compete in the semiconductor space?

“Make no mistake, it is a known fact that other states in Malaysia like Penang have had more than half-a-century headstart in the manufacturing of semiconductors. At this juncture, we don’t intend to compete because we do not have all our chips in one basket.

“Selangor’s economy is diverse, with a large share of services being the heartbeat of not only Selangor’s but Malaysia’s economy. But that is not to say that by starting small, we want to remain forever small,” he said in his speech during the launch of the Malaysia Semiconductor IC Design Park: Selangor Hub, here.

Former Penang Chief Minister Lim Guan previously criticised the Penang government for losing the opportunity to host the IC design park to Selangor which led to the state losing investment opportunities.

However, Penang Chief Minister Chow Kon Yeow said that high-tech companies that have shown an interest in Selangor’s IC design park are also in discussions to invest in Penang.

Amirudin said that the state government is taking advantage of the technological battles between the US and China by venturing into this industry.

“These microchips aren’t solely used in our mobile phones. There will soon be thousands of these chips in each vehicle, especially new automotive products using high-end ADAS systems and operating using electric power instead of fossil fuels.

“Generative AI is the preeminent trend of our times, and we haven’t even begun diving into the potential of quantum computing and the clean energy sector as the world unites around building a more resilient planet for our younger generation.

“On the other hand, I believe the battle between the two global giants, the US and China, will not only be about who has more military muscle, but who has a bigger role and intellectual property in the digital world. It will be a technological battle. And semiconductors will be the heartbeat of the global economy moving forward,” he said.

The Malaysia Semiconductor IC Design Park: Selangor Hub, which is the biggest in the Southeast Asia region, spanning 60,000 square feet and located in PFCC Puchong, was officially launched today.

The project is expected to bring in economic returns of RM500 million to RM1 billion.

Source: Malay Mail

Selangor MB: New IC design park not competing with Penang, will diversify economy

Malaysia is making significant strides in developing its own semiconductor design capabilities, reducing reliance on imported chips.

Economy Minister Rafizi Ramli highlighted the federal government’s strategic initiative to bolster the entire semiconductor ecosystem. The plan encompasses upstream and downstream sectors, with a particular focus on enhancing the role of original design manufacturers (ODM).

“The chips’ data racks require ODM, so the federal government is looking at the overall ecosystem to complete it. We are going to have the federal agencies go down and work directly with the key players,” Rafizi told reporters at the launch of Malaysia Semiconductor IC Design Park today.

Aiming to transition from “Made in Malaysia” to “Made by Malaysia”, Malaysia Semiconductor IC Design Park, in partnership with the federal government, international semiconductor companies and venture capitalists, seeks to establish Malaysia as a formidable player in the global IC (integrated circuit) design industry.

Additionally, the launch of Malaysian Semiconductor IC Design Park sets the stage for the country to become a high-tech semiconductor hub, as this achievement is a notable success of the KL20 Initiative announced in April.

Among those who attended the launch at Puchong Financial Corporate Centre were Selangor Menteri Besar Datuk Seri Amirudin Shari and Selangor exco for investment, trade and mobility Ng Sze Han.

Rafizi expressed Malaysia’s ambition to become a significant force in the global IC design sector.

“This strategic initiative is intended to capitalise on Malaysia’s technological strengths and resources, fostering innovation and enhancing the nation’s standing in high-tech manufacturing and design,“ he said in his speech.

No single nation or region could claim complete control over the entire semiconductor supply chain, as no country possesses expertise in every segment of the value chain, Rafizi said.

“For example, the equipment, materials, electronic design automation, and integrated device manufacturer sectors are divided among the United States, Europe and other parts of the world. Meanwhile, China and Taiwan hold significant shares in fabless, foundries, and outsourced semiconductor assembly and test services.”

Rafizi said this presents an opportunity for Malaysia as it delves into different segments of the value chain, such as IC design, advanced packaging, and advanced equipment.

“A globally dispersed value chain offers a genuine opportunity for established semiconductor ecosystems like Malaysia to compete, as we are not starting from scratch and are not solely competing with mature ecosystems dominating the space,“ he added.

Amirudin highlighted the critical role semiconductors will play in the future global economy.

“I believe the contest between the two global giants, the United States and China, will not only be about military prowess but also about intellectual property and influence in the digital realm. It will be a technological battle.

“In Selangor, we must prepare for all eventualities and enhance our talent pool, nurturing experts in IC design,“ he said.

Selangor Information Technology and Digital Economy Corporation (Sidec) CEO Yong Kai Ping said Malaysia Semiconductor IC Design Park is actively recruiting skilled candidates with degrees in electrical and electronics engineering, mechanical engineering, mechatronics, and computer science and is offering highly competitive salaries.

“Entry-level positions start between RM5,000 and RM6,000 for fresh graduates, while individuals with a master’s degree or extensive industry experience can earn up to RM7,000,” he added.

Furthermore, Sidec is assisting Malaysian and international IC companies in recruiting experienced engineers with four to eight years of experience. These engineers will play a pivotal role in leading the expansion of these companies within Selangor IC Design Park.

Source: The Sun

Rafizi: Malaysia making big strides in enhancing semiconductor design capabilities

Selangor’s newly-opened integrated circuit (IC) design park in Puchong is offering fresh engineering graduates salaries matching those in its neighbours Singapore and Vietnam, according to the Selangor Information Technology and Digital Economy Corp (Sidec) chief executive officer Yong Kai Ping.

The state is offering undergraduate engineers salaries ranging from RM5,000 to RM6,000, while master’s degree holders can expect to earn RM7,000, as it aims to secure the best talents for the local semiconductor industry.

“Malaysia and Southeast Asia are lacking talent [in the IC design] compared to China, Taiwan and Korea. So, we must offer salaries that match those in Singapore, otherwise, our top talent will [leave] for our neighbours or even to Vietnam,” Yong spoke to The Edge after attending the groundbreaking opening of IC design park in Puchong Financial Corp Centre (PFCC) on Tuesday.

Puchong IC design park, which is set to house over 400 engineers, has so far received 3,300 resumes spanning from junior to senior-level engineers. It is actively recruiting skilled candidates with degrees in electrical and electronics (E&E) engineering, mechanical engineering, mechatronics, and computer sciences.

At the same time, Sidec is also assisting Malaysian and international IC companies in recruiting experienced engineers with four to eight years of experience. 

“These engineers will play a pivotal role in leading the expansion of these companies within the Selangor IC design park,” Yong said.

The IC design park in Puchong currently comprise global semiconductor tenants including Maistorage, Skyechip, Weeroc, AppAsia ChipsBank, SensoremTek Sdn Bhd, with several ecosystem partners such as BlueChip VC, ARM Holdings, Cadence Design System, Synopsys, Siemens EDA and Keysight and Shenzhen Semiconductor Association.

Source: The Edge Malaysia

Selangor’s semiconductor park offers fresh engineers on-par salary with Singapore, Vietnam — CEO

When SK Group, South Korea’s second largest conglomerate, was looking to expand its copper foil productions overseas, Kota Kinabalu (KK), known more for its sunsets and islands, was not the first place that came to mind.

That was where Malaysian Investment Development Authority (Mida) came in, introducing the group to Sabah’s government who jumped at the opportunity.

In May last year SK Group’s SK Nexilis, the world’s largest copper foil maker, started production at its first overseas factory at the Kota Kinabalu Industrial Park, the biggest copper foil factory in the world.

The factory is capable of producing up to 57,000 tonnes of copper foil annually.

“We have started part production which will be sent to clients and will then be audited. We expect to be fully operational by September or October,” SK Nexilis’s strategy and planning manager Boo Jae-cheol told Malay Mail in a recent interview.

Last October, the Fortune 500 company exported its first shipment of 80 tonnes with an export value of RM1.9 million from Sabah to North America.

At its full capacity, the plant will contribute some RM3 billion to the state’s gross domestic product (GDP).

Its second overseas plant will be in Stalowa Wola, Poland which will have similar or slightly lower capacity.

The company also boasts the world’s longest, thinnest and widest copper foil, as thin as four micrometres, which can be described as one-fifth the thickness of clear food wrap.

SK Nexilis’s copper foil will be used exclusively for electric vehicles globally.

Currently the group has a 22 per cent market share in copper foil, with global demand predicted to grow exponentially with the use of electric vehicles.

Investment in Kota Kinabalu

The factory is set on 100 acres (roughly the size of 75 football fields) in KKIP next to China’s Kibing solar plant which may help with its green energy plans.

“One of the main attractions for us to invest in KK was the readily available land. It was a good size, and already cleared which saved us time and expenses to clear land for construction,” said Boo.

Other considerations were English-speaking labour, and the favourable terms and conditions such as lower electricity tariffs, and corporate tax exemption.

“But I think the biggest reason is the strong commitment and investor friendly policies of the state government,” said Boo.

The RM2.3 billion plant will almost undoubtedly be the state’s largest power consumer with an estimated 70MW power usage with an up to RM122 million power bill per year which gives the state utility company Sabah Electricity Sdn Bhd a 10 per cent sales increase.

In return, SK Nexilis hired 95 per cent of its 350 strong work force from the Malaysian market, mostly Sabahans, with only key management positions held by South Korean nationals.

“It is imperative that we use a local workforce instead of bringing in Koreans from home. But we have to bridge the cultural and language divide, so we have sent some of the staff to Korea for a cultural exchange and help them understand the company better.

“We also have language classes so they can deal with the headquarters on their own sometimes,” said Boo.

The company is also expected to bring in more investment from Korea such as subsidiaries and complementary industries to help maximise the capacity and efficiency of its raw material processing.

“With the growing demand for copper foil worldwide increasing with the use of EV, we wanted to expand our production, but we needed to do it at lower costs.

“The plant in Sabah will make us more cost-effective while our plant in Poland is also strategically located to reach the European market. That will help us be more competitive in this market,” said Boo.

Source: Malay Mail

Great for business: South Korea’s SK Nexillis says Sabah’s investor-friendly policies, ready land makes it ideal location

United States (US) chip-maker Intel is continuing with its Penang expansion plans, which suggests that retrenchment is not on the table as part of its cost-cutting efforts as reported, said Chief Minister Chow Kon Yeow.

“We did not visit Intel during my recent trip to the United States (US) and the state has not been informed of any retrenchment plans.

“We do not know how it will impact Penang but they are building their expansion here now. So we would expect them to recruit rather than retrench staff,“ he told reporters after a few agreements were signed between IJM Perennial Development and Maxis Broadband Sdn Bhd, GlobalComm Telecommunications Sdn Bhd, Hyatt International – Asia Pacific and Galaxy Minyoun Hotel at The Light City here today.

Earlier this month, the foreign media reported that chipmaker Intel had announced plans to slash more than 15 per cent of its workforce under a restructuring plan.

It was also reported that the California-based company will shed about 15,000 jobs as part of efforts to cut costs by US$10 billion in 2025.

Intel reported a revenue of US$12.8 billion in the second quarter of financial year 2024, down one per cent from a year ago and a US$1.6 billion net loss.

On his recent official US visit, Chow said Penang has received affirmation from existing investors that they have plans to continue expanding their operations.

“A majority of the companies we visited comprised existing investors who are thinking of expansion plans,“ he said.

He noted that the mission led by him together with InvestPenang delegates focused on renewing ties and strengthening relationships with American investors in Penang.

The Aug 4-14 mission involved 22 official strategic meetings and site visits to encourage further expansion of their Penang operations and to attract new investments.

The delegation visited MKS Instruments, Brooks Instrument, Lattice Semiconductor, AMD, Synopsys, Efinix, Agilent, Coherent, SambaNova and Western Digital, Centific, Monolithic Power Systems (MPS), Dexcom, Cohu, UST, TTM Technologies, Mattel and potential investors.

Source: Bernama

Intel continuing with Penang expansion plans – Chow

South Korean company OCI Holdings has reaffirmed its commitment to continue expanding production in Sarawak with a potential reinvestment value of RM3.1 billion in polysilicon for photovoltaic use.

Sarawak Deputy Premier Datuk Amar Awang Tengah Ali Hasan said in a press statement this expansion is expected to create 400 direct employment opportunities.

Awang Tengah, who is also International Trade, Industry and Investment Minister, said OCI Holdings is a global chemical company producing polycrystalline silicon, hydrogen peroxide, and other chemical-related materials.

He led a Sarawak delegation to meet with OCI Holdings chairman Lee Woo Hyun in Seoul, yesterday.

In 2017, OCI Malaysia Sdn Bhd (OCIM) acquired 100 per cent stake of the polysilicon production facility in Malaysia owned by Tokuyama.

Currently, OCIM has invested over RM8 billion in Sarawak to produce polysilicon for solar industries.

OCIM will further expand and diversify its production in chemical materials in Sarawak.

The company has a joint venture with Kumho and Tokuyama to produce epichlorohydrin and semiconductor grade polysilicon respectively.

“These investments are worth more than RM3.2 billion, which is expected to create 400 new jobs,” Awang Tengah said in the statement.

Lee also expressed OCI Holdings’ interest to further explore potential investment in power development, especially renewable energy in Sarawak through subsidiary OCI Energy.

This proposal was welcomed by Awang Tengah as it underscores Sarawak’s commitment to be a leader in green energy.

“Their participation in green power development will further enhance the energy security of Sarawak whilst contributing to sustainable economic growth and environmental stewardship,” he added.

OCI is a global company with a significant focus on renewable energy and energy storage systems.

Currently, OCI Energy is the largest independent solar developer in Texas, United States.

Source: Borneo Post

South Korea’s OCI Holdings reaffirms Sarawak production expansion, potential RM3.1 bln reinvestment value

iMin Technology, an Androidbased point of sales (POS) hardware and platform provider based in Singapore, has opened its first production facility outside China in Senai here.

Chief executive officer Hu Aimin said the cutting-edge facility, operated through Neostra Sdn Bhd, represents a significant milestone in the company’s expansion strategy in enhancing its manufacturing capabilities and strengthening its supply chain to meet the global demand from its fast-growing clientele while leveraging on Malaysia’s competitive edge.

“Malaysia offers a conducive environment for business growth, with its robust infrastructure, skilled workforce and supportive government policies.

“Our decision to establish a manufacturing facility here is a strategic move to tap into the vast opportunities that Malaysia presents,” he said in a statement today.

He said the facility’s opening marked the start of more than just an expansion but the beginning of a dynamic exchange of knowledge and expertise.

Hu said iMin’s deep industry knowledge and advanced technological capabilities would facilitate a valuable transfer of information and skills to the local workforce and industry partners.

“The integration of global expertise with local insights will drive innovation and elevate industry standards, creating a collaborative environment that will benefit both iMin and the broader business
community in Malaysia.

“We are confident that our presence in Malaysia will not only enhance our production capabilities but also contribute significantly to the local economy and community,” he said.

The ceremony was graced by the state’s Investment, Trade, Consumer Affairs and Human Resources Committee chairman Lee Ting Han, Malaysian Investment Development Authority (MIDA) Singapore director Vinothan Tulisinathzan and MIDA Johor director Mohamad Reduan Mohd Zabri.

Meanwhile, Lee said iMin’s strategic decision to set up a production facility in Johor reflected a strong vote of confidence in the country’s robust economic policies, political stability and business regulations.

He added that Malaysia and Singapore shared a robust and mutually beneficial economic and trade relationship and this collaboration would serve to keep the positive momentum going while creating jobs and fostering innovation between the two nations.

Source: Bernama

iMin Technology opens first production facility outside China in Johor

PANTECH Group Holdings Bhd (KL:PANTECH) is working towards the listing of two of its five manufacturing units on Bursa Malaysia as soon as practicable, in a move aimed at raising funds for expansion as well as gaining the group recognition as a maker of steel products rather than just a trader.

“The new listco is intended to uplift our profile as a global manufacturing business among new overseas clients since Pantech Group has historically been known as a trading company. Looking at the group’s historical price-earnings ratio (PER) of about seven to nine times, that shows us that Pantech is still regarded as a trading company, even with very viable manufacturing operations,” Pantech Group executive director Adrian Tan tells The Edge in an interview ahead of the group’s annual general meeting (AGM) on July 30.

Given Pantech’s financial performance, he says the group should be trading at “more than 10 times” PE multiples rather than single digits (see profitability chart).

“Internally, we have earmarked and prepared key personnel to move over to the new listed company (listco),” he adds, noting that an extraordinary general meeting (EGM) for shareholders’ approval will only be called once regulatory approval has been received.

When asked if the listing would happen this year, Tan says: “We are working diligently to secure all necessary approvals and will make the necessary announcements once more details are confirmed [or when there are updates from] the regulator.”

Going by the typical timelines for corporate exercises, if regulatory approval does not come within the next three months, it is likely that the listing will happen next year at the earliest as there needs to be 21 days’ notice to call an EGM and time to prepare the circular to shareholders. Tan declines to provide a timeline for the exercise.

In Pantech’s announcement to the stock exchange on April 25, the company said “it is essential for shareholders to note that the proposed listing may or may not realise as there is no guarantee that the required approvals would be obtained or the proposed listing [of Pantech Stainless & Alloy Industries Sdn Bhd (PSA) and Pantech Steel Industries Sdn Bhd (PSI)] will proceed”.

Tan says Pantech has submitted documents to the Securities Commission Malaysia (SC) to secure approval for the listing and is awaiting the green light. While the proposed exercise is not on its July 30 AGM agenda, the management expects to field questions on it.

He explains that the objective of the listing is to derive better valuations for the group’s two 100%-owned global manufacturing units PSA and PSI, which are “doing extremely well, have good margins and collectively contribute about 70% to the group’s manufacturing division”.

Main Market-listed Pantech has two main divisions, trading and manufacturing, both of which contribute almost equally to group revenue.

Pantech supplies products such as pipes, valves and fittings (PVF) flanges and other fluid transmission-related products to its customers in various industries locally and overseas. For the overseas market, 20% of revenue comes from its trading division and 70% from manufacturing. Its three biggest export markets are the US, Europe (Pantech owns UK-based Nautic Steels Ltd, which supplies to the continent) and the Middle East.

“We have been looking at expanding into South America and Africa. Pantech has established markets in the US and Europe, where we receive steady streams of orders. We are growing our South America presence for our products and hoping to make further inroads into the North African region. There is also interest from Egypt and Tunisia, so we’re hopeful about that,” says Tan.

On the proposed listco’s prospects, he says PSA and PSI serve about 30 export markets.

“The margins are good. Gross margins for the global business are at least 30% with sustainable net margins of 10% and 11%. The net margin for the group, as a whole, was 11% in FY2024. A few smaller manufacturing companies cater mainly to the local market and neighbouring countries, namely Thailand and Indonesia.”

Tan declines to elaborate on how much the flotation exercise is expected to raise or the likely market capitalisation of the listco but does say the proceeds will help the latter’s expansion plans.

“The listco will buy over Pantech’s manufacturing plants in Johor and Klang, which are currently being rented. The IPO proceeds will also be used to acquire technological upgrades to boost manufacturing capacity by another 20% to 25%. Some of the equipment needs to be modernised so as to reduce over-reliance on labour,” says Tan, declining to divulge the capital expenditure involved.

According to Pantech’s 2024 annual report, PSA and PSI had annual capacities of 21,000 tonnes and 18,000 tonnes, and had achieved 90% and 80% output respectively. In terms of tonnage, the companies make up nearly half of the 87,800-tonne total capacity at four of its manufacturing units. A fifth manufacturing unit, Unity Precision Engineering Sdn Bhd, has an annual capacity of 60,000 hours with 80% output achieved (see table). Pantech’s trading arm has a portfolio of more than 30,000 PVFs and ancillary products sourced globally, which make up an inventory worth RM198.11 million and contributed revenue of RM510.98 million to the group in FY2024. The manufacturing division contributed RM435.65 million.

It owns another facility in Johor following the acquisition of metal precision machining, engineering and turnkey solutions outfit Unity Precision Engineering Sdn Bhd for RM13 million in 2022. It also owns a galvanising plant in Johor and a plant in the UK, Nautic Steels, that produces fittings in special metals (copper nickel & nickel alloy).

Pantech was certified as one of only two companies operating in Malaysia to be genuine manufacturers of carbon steel buttweld fittings, in anti-circumvention crackdowns by the US Department of Commerce in 2018 and by the European Union (EU) in 2022.

“Pantech was only serving about a handful of European customers when the EU’s crackdown took place. But we gained new customers after being cleared by the authorities,” Tan points out.

Locally, the group has enjoyed a steady flow of orders from the engineering, procurement and construction contractors of projects such as that of Sarawak Shell Bhd at the F22, F27 and Selasih (FaS) gas field development off the coast of Sarawak as well as Petroliam Nasional Bhd’s Kasawari 1, a carbon capture and storage project, located off Sarawak, and the Jerun gas field development, also in the state.

“This past [financial] year, we have been doing rather well because there have been lots of projects like FaS. We supplied to Petroliam Nasional Bhd’s Kasawari 1, and we’re now on to Kasawari 2, to which we will continue to supply until its completion later this year,” says Tan.

“Contributions from the oil and gas sector still make up 40% of Pantech’s local maintenance orders as players have a major turnaround every three to four years alongside regular upkeep every six months. One of these projects, for instance, will need its maintenance next year so we have to be prepared to take their orders on.”

As at June 30, 2024, Pantech’s order book stood at RM400 million, with deliveries expected to be completed by next February.

For the fourth quarter ended Feb 29, 2024 (4QFY2024), Pantech registered a 21.6% higher net profit of RM28.7 million from RM23.6 million last year, on a 16.6% improvement in revenue to RM229.7 million. However, because of softer sales and lower average selling prices (ASPs), FY2024’s net profit of RM105.3 million was 9% lower than the RM115.6 million in FY2023. Revenue was 8.8% weaker y-o-y at RM946.3 million.

Tan explains that there was a sharp increase in freight rates in 2022 and in the price of raw materials then because of the Russia-Ukraine war, leading to a significant increase in ASP. “But [FY2024] was stable, with lower ASP and lower raw material prices, such that Pantech has continued to make good profits.

“In terms of revenue growth, we’re confident of a 10% increase in FY2025,” Tan adds, without commenting on earnings.

While Pantech does not have a dividend policy, it typically pays out 40% to 50% of its profits to shareholders. When the pandemic broke out, the group continued to pay out 1.89 sen and 2.3 sen a share in FY2020 and FY2021 respectively. It raised the annual payout to four sen a share in FY2022, followed by a record high of six sen a share in FY2023 and FY2024.

Impact on Pantech, prospects for listco

Although Pantech has yet to announce details on the proposed IPO, fund managers and an analyst whom The Edge spoke to believe there will be an issuance of new shares for the listco. This, they say, could have a dilutive impact on Pantech’s earnings, thus lowering profit attributable to its shareholders and causing downward pressure to the share price.

Year to date, Pantech has risen 23.3% to close at RM1.11 last Wednesday (July 17), reflecting a PER of 8.76 times.

“To make up for the shares carved out for the spin-off, Pantech will need at least 30% to 40% in earnings growth next year. Pantech’s anticipated capacity boost of 20% to 25% will help, otherwise earnings per share could drop substantially. But looking at Pantech’s strong balance sheet, I believe it can still pay annual dividends of six sen per share for the next three years and still be in a net cash position,” surmises the analyst, who declines to be named.

“For a counter related to the oil and gas industry, a dividend yield of 5.5% makes Pantech a great dividend stock, even if it is categorised as part of the industrial products and services index,” the analyst says.

The fund managers and analysts believe that the listco will garner investor interest if priced well, given that Pantech has built a commendable export business.

“We still don’t know the indicative PE for the listco, but assuming it will be at 12 times looking at other similar manufacturers of steel products which are trading averagely at a forward PE of 10.5 times, I would ascribe a premium to Pantech’s spin-off based on its historical performance. I would say that’s a fair PE for the listco,” says the analyst, who remains “neutral” on the listing based on a lack of concrete details and the expected dilution to EPS.

Bloomberg data shows that the two analysts covering the stock have “buy” calls with target prices of RM1.23 and RM1.35, indicating upside of at least 10.8%. But that is without pricing in the impact of the flotation exercise, given scant information on the matter.

“Management probably thinks a separate listing for the manufacturing division could give it a better valuation than what it is getting … Sometimes, splitting the company could be for succession planning such as enabling family members to take charge of the separate entities. Only time will tell [the real reason],” observes a fund manager. 

Source: The Edge Malaysia

Pantech eyes better valuation with manufacturing unit IPO

Efforts are already underway to identify suitable locations for Selangor’s second Integrated Circuit (IC) Design Park as the state continues its push in the semiconductor industry.

This is despite the first IC Design Park in Puchong — the first of its kind in Malaysia — yet to be officially launched.

According to state executive councillor investment, trade, and mobility Ng Sze Han, this initiative is driven by the high demand from industry players, and discussions with the Federal government pertaining to the second park are ongoing.

“The first IC Design Park in Puching is already at full capacity. We are currently in the process of identifying a suitable location for IC Design Park 2.0.

“Subsequently, we will consider further expansion if there is sufficient demand,” he told the press after a site visit to Jalan Puchong Jaya to monitor the road expansion works today.

Ng added that developing IC Design Parks requires significant financial allocation.

The Selangor IC Design Park, located at the Puchong Financial Corporate Centre (PFCC) and developed by the state government, is set for launch on August 6.

The park will provide access to design tools, servers, as well as intellectual property and training programmes to support local and international IC design companies.

It is expected to generate over 300 high-value jobs for IC design engineers in its first year.

Meanwhile, the councillor said the development of new design parks will not be limited to industrial areas, with the state also considering land on commercial zones.

“There are actually many suitable locations available that we can offer, including commercial areas. But there are specific criteria that we need to comply with to meet the demands of the companies in this industry.

“These include a stable electricity supply, 5G connectivity, and access to public transportation,” he said.

Similarly, Ng said sufficient electricity and water supply are also crucial criteria for operating data centres, another industry that Selangor is currently focusing on.

“We are currently equipped to meet the needs and demands of data centres.

“However, we must exercise caution to ensure that the data centres coming into Selangor are genuinely necessary and not arbitrarily established. They should align with the ecosystem requirements in Malaysia,” he said.

Earlier today, Selangor Journal reported Selangor Information Technology and Digital Economy Corporation’s chief executive officer Yong Kai Ping as saying that the state is looking to launch an IC Design Park every year until 2028.

Source: Selangor Journal

Selangor IC Design Park 2.0 in the works

X-FAB Sarawak Sdn Bhd, a subsidiary of X-FAB Silicon Foundries SE, on Monday hosted a visit by federal Investment, Trade and Industry Minister Senator Tengku Datuk Seri Zafrul Tengku Abdul Aziz and a delegation of approximately 40 members.

X-FAB Group board of directors chairman Tan Sri Hamid Bugo was present to welcome the delegates, the company said in a press statement today.

During their visit, the minister was given a tour of the state-of-the-art facilities by X-FAB Sarawak chief executive officer Lee Boon Chun, who said the Kuching site was the largest and most modern manufacturing facility within the X-FAB group which also runs production sites in Germany, France and the United States.

This visit came at a significant time as X-FAB Sarawak was expanding its capacity.

“A new building is under construction, which will feature additional clean room space essential to meet the strong demand for X-FAB’s specialty 200mm CMOS technology, in particular its popular 180nm automotive processes.

“Every new car worldwide has on average more than 20 chips made by X-FAB inside.

“In the dynamic landscape of semiconductor manufacturing, it is with immense pride that we showcase the expansion of X-FAB Sarawak,” Lee was quoted as saying.

“The addition of a new building equipped with cutting-edge clean room facilities for our 200mm CMOS technology is a testament to our relentless pursuit of excellence,” he added.

“Hosting the honourable Minister Tengku Zafrul Aziz, along with his delegation, provides us with the unique opportunity to demonstrate our advancements and our unwavering commitment to contributing to the industry’s growth.

“We are not just constructing buildings and expanding capacity; we are building the future for X-FAB’s specialty technologies here in Kuching,” said Lee.

The progress of the construction is on schedule, with the equipment move-in planned for the fourth quarter.

X-FAB is the leading analogue/mixed-signal and MEMS foundry group manufacturing silicon wafers for automotive, industrial, consumer, medical and other applications.
Its customers worldwide benefit from the highest quality standards, manufacturing excellence and innovative solutions by using X-FAB’s modular CMOS and SOI processes in geometries ranging from 1.0µm to 110nm, and its special silicon carbide and MEMS long-lifetime processes.

X-FAB’s analogue-digital integrated circuits (mixed-signal ICs), sensors, and micro-electro-mechanical systems (MEMS) are manufactured at six production facilities in Germany, France, Malaysia and the US. X-FAB employs approximately 4,500 people worldwide.

Source: Borneo Post

Tengku Zafrul tours X-FAB Sarawak’s facilities

Selangor has set an ambitious goal of nurturing at least 10 home-grown integrated circuit (IC) design companies within the next five years as it shifts the focus towards the semiconductor industry’s front-end. 

State executive councillor for investment, trade, and mobility Ng Sze Han said the landmark development of the Selangor IC Design Park in Puchong, scheduled for launch next week, is crucial to move Malaysia up the semiconductor value chain. 

While states like Penang and Kedah are currently heavily focused on back-end processes like packaging and testing, it is Selangor’s goal of emphasising on the front-end of design and innovation. 

“I believe it will create a very big economic impact on Selangor and Malaysia. What we want to see is the cultivation of homegrown semiconductor talents and companies that can compete on a global scale. 

“At this moment, Malaysia is very strong on the back-end. What we are focusing on is the front-end. We want to help Malaysia build a more complete ecosystem. 

“So, our target for the next five years is to hopefully develop ten homegrown IC design companies,” he said as a guest during a recent BFM’s Top Story podcast.  

Ng added that Selangor is also working closely with the Federal government to attract more quality IC design firms into the country and retain local talents, with the Selangor IC Design Park an example of efforts undertaken by the state to realise these goals. 

He said the park is expected to create about 300 high-paying engineering jobs, with competitive starting salaries of between RM5,000 and RM7,000 for fresh graduates. 

“The ripple effect from this will benefit other businesses and industries as well, including restaurants, real estate, and logistics. 

Earlier today, Selangor Journal reported Selangor Information Technology and Digital Economy Corporation’s chief executive officer Yong Kai Ping as saying that the state is looking to launch an IC Design Park every year until 2028.

He said Selangor wants to leverage the success of its first IC Design Park in Puchong, which is already at full capacity, with plans already underway for more similar parks in the coming years. 

On what Selangor is doing to ensure its local workforce is competent enough to fill up vacancies following an increase in investments, Ng said the state government is developing different types of upskilling programmes in collaboration with industry players. 

Previously, it was reported that Selangor had secured 363 projects valued at RM12.4 billion in the first three months of this year, creating 8,377 employment opportunities.

The investment value represents a 66.8 per cent increase from the RM7.44 billion in the same quarter of the preceding year.  

Meanwhile, when asked how Selangor is managing the increased demand for power and water as a result of the development of more data centres in the state, the councillor said Selangor will have to carefully decide which of these projects are the most needed. 

He cited Google’s US$2 billion (RM9.25 billion) investment in Malaysia as an example, which will include the development of its first Google data centre and Google Cloud region at the Elmina Business Park in Sungai Buloh. 

The investment is expected to generate over 26,000 jobs across various sectors including healthcare, education, and finance, and is crucial to the semiconductor ecosystem. 

Source: Selangor Journal

Selangor eyes ten homegrown IC design firms in five years

The Selangor administration is looking to launch an Integrated Circuit (IC) Design Park every year until 2028, said Selangor Information Technology and Digital Economy Corporation (Sidec) chief executive officer Yong Kai Ping.

Yong said the state wants to leverage the success of its first IC Design Park in Puchong.

“The IC Design Park in Puchong is already at full capacity. The next step is the official launch of the design park in August this year, where we will see nine companies coming in, and we aim to fulfil the immediate need of 400 trained engineers, potentially expanding to 600.

“But there are already plans for a second park, which is anticipated to launch next year. The long-term vision includes launching a new park each year, aiming for four or five parks over the next four years,’’ he told Selangor Journal on the sidelines of the First Series of the Selangor International Business Summit (SIBS) 2024, held at the Kuala Lumpur Convention Centre from July 25 to 27.

Yong explained that Sidec aims to boost the semiconductor industry, particularly in the IC design aspect, in hiring and retaining talents, to meet a global, critical need.

Yong briefly said the main issue is the demanding nature of the semiconductor industry, which requires a combination of skills in electrical and electronic engineering, mechanical engineering, and computer science.

“For IC design, companies would often only hire those with master’s degrees. To help with this issue, we aim to increase on-job training for degree holders, and promote master’s programmes with universities such as (Universiti Malaya) and (Universiti Kebangsaan Malaysia), as well as international collaborations with Taiwan, China, and Japan.

“Our overall strategy includes training 2,000 IC engineers over the next four years, with a target of 400 to 500 engineers per year. This includes not only fresh graduates, but also senior engineers returning from abroad,’’ he said.

Apart from the collaborations to expand local training programmes in specialised areas like IC design, Yong said Sidec is also looking to develop training plans for local graduates to produce semiconductor equipment.

“There is a focus on semiconductor equipment production — a lucrative but underdeveloped area in Malaysia. I think this could create opportunities for our Technical and Vocational Education and Training students.

“Overall, our model is very straightforward. By opening more centres and attracting more companies, we can recruit and train the necessary engineers. These programmes are also supported by the positive response from industry players, who are always eager for more talent,’’ he said.

Source: Selangor Journal

Selangor plans to launch an IC design park each year until 2028

The government has proposed that Sarawak becomes Malaysia’s hub for the aerospace industry, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. 

He said the proposal was one of the discussion points during the Sarawak Industry Coordination Joint Committee Meeting here on Monday.

Zafrul said the state had shown great potential in the industry, especially in the commitment to produce skilled workers for the sector. 

“Sarawak has previously made an announcement (commitment) to produce talents in universities [in Sarawak] focusing on the aerospace industry. 

“So, we think that there will be talents available, and in terms of geography, Sarawak’s location is excellent as it is close to Nusantara (Indonesia’s capital), near South Korea, Japan and even Australia,” he told reporters after the meeting.

The meeting was also attended by Sarawak Deputy Premier Datuk Amar Awang Tengah Ali Hassan, who is also the state’s international trade, industry and investment minister. 

Zafrul said the proposal to develop a new international airport in Kuching, as well as the establishment of a Sarawak-owned airline, could also help the development of the aerospace industry in Bumi Kenyalang. 

He said his ministry, via the Malaysian National Aerospace Industry Corporation (Naico Malaysia), will also work with Sarawak in achieving the development agenda for the industry. 

“We also see that the aerospace industry will be able to open up opportunities in the maintenance, repair and overhaul industry, as well as in terms of the manufacturing sector, because the aerospace industry requires companies to be involved in the manufacturing sector,” he said.

Previously, Sarawak Premier Tan Sri Abang Johari Tun Openg was reported to have said that Sarawak will open an aerospace training centre in preparation for a serious involvement in the aviation industry. 

Abang Johari said the training centre would be established in Tanjung Bako, Kuching, while theory classes would be held at the Sarawak Centre of Technological Excellence in Lundu. 

Source: Bernama

Govt proposes Sarawak as Malaysia’s aerospace hub

Malaysia needs to ship RM1.2 trillion worth of semiconductor exports by 2030 to maintain its position as the sixth largest exporter in the world.

Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said that achieving such a significant increase will demand concerted efforts across various facets of the semiconductor value chain.

He highlighted that this goal represents a compound annual growth rate of about 7.6% from the current export value.

“To achieve this growth, Malaysia will need to focus on improving its capabilities across the semiconductor value chain, including advanced packaging, integrated circuit (IC) design, and smart manufacturing,” he said in a fireside chat at Tech in Asia Conference 2024 recently.

Wong stressed the necessity for collaboration between the government and the industry to tackle existing challenges, particularly talent shortage, attracting foreign investment and supporting the development of local semiconductor companies and ecosystems.

He said: “300,000 technical talents and engineers are needed in the sector, which the government and industry will need to work together to attract, train, and retain more local talent through initiatives like scholarships, cross-disciplinary training programmes, and collaborations with universities.”

The government, Wong said, needs to allow the strategy of using other countries’ talent in bridging the gap of the industry’s talent shortages. “The government should try to get all foreigners who study in Malaysia, especially in science and engineering, to continue working in Malaysia. This is under consideration and MSIA is hopeful to hear some positive news.”

He added that attracting foreign direct investment from multinational semiconductor companies is crucial for driving technology transfer and bolstering the local ecosystem. This may require offering competitive incentives and reducing barriers to entry to make Malaysia a more appealing destination for such investments.

Wong pointed out that the government’s National Semiconductor Strategy aims to nurture 10 Malaysian companies in advanced packaging and IC design.

“Providing funding, mentorship, and other support for local startups and small and medium enterprises will be essential in building a stronger indigenous semiconductor industry. Such measures are critical for fostering innovation and ensuring the industry’s sustainability.

“As for improving productivity and automation, upgrading manufacturing capabilities through smart automation and Industry 4.0 technologies will be key to enhancing productivity and competitiveness in the semiconductor industry.”

Adopting these advanced technologies will help streamline processes and reduce costs, making Malaysian semiconductor products more competitive on the global stage, Wong said.

“The government should continue to position Malaysia as an attractive alternative manufacturing hub for advanced semiconductor products. This strategic positioning is crucial as multinational companies seek to diversify their supply chains in response to global uncertainties.”

He expressed optimism about Malaysia’s potential to solidify its position as a leading semiconductor manufacturing hub. “With the right policies, investments, and collaborative efforts, Malaysia has the potential to achieve its ambitious growth targets for the industry,” Wong said.Malaysia needs to ship RM1.2 trillion worth of semiconductor exports by 2030 to maintain its position as the sixth largest exporter in the world.

Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said that achieving such a significant increase will demand concerted efforts across various facets of the semiconductor value chain.

He highlighted that this goal represents a compound annual growth rate of about 7.6% from the current export value.

“To achieve this growth, Malaysia will need to focus on improving its capabilities across the semiconductor value chain, including advanced packaging, integrated circuit (IC) design, and smart manufacturing,” he said in a fireside chat at Tech in Asia Conference 2024 recently.

Wong stressed the necessity for collaboration between the government and the industry to tackle existing challenges, particularly talent shortage, attracting foreign investment and supporting the development of local semiconductor companies and ecosystems.

He said: “300,000 technical talents and engineers are needed in the sector, which the government and industry will need to work together to attract, train, and retain more local talent through initiatives like scholarships, cross-disciplinary training programmes, and collaborations with universities.”

The government, Wong said, needs to allow the strategy of using other countries’ talent in bridging the gap of the industry’s talent shortages. “The government should try to get all foreigners who study in Malaysia, especially in science and engineering, to continue working in Malaysia. This is under consideration and MSIA is hopeful to hear some positive news.”

He added that attracting foreign direct investment from multinational semiconductor companies is crucial for driving technology transfer and bolstering the local ecosystem. This may require offering competitive incentives and reducing barriers to entry to make Malaysia a more appealing destination for such investments.

Wong pointed out that the government’s National Semiconductor Strategy aims to nurture 10 Malaysian companies in advanced packaging and IC design.

“Providing funding, mentorship, and other support for local startups and small and medium enterprises will be essential in building a stronger indigenous semiconductor industry. Such measures are critical for fostering innovation and ensuring the industry’s sustainability.

“As for improving productivity and automation, upgrading manufacturing capabilities through smart automation and Industry 4.0 technologies will be key to enhancing productivity and competitiveness in the semiconductor industry.”

Adopting these advanced technologies will help streamline processes and reduce costs, making Malaysian semiconductor products more competitive on the global stage, Wong said.

“The government should continue to position Malaysia as an attractive alternative manufacturing hub for advanced semiconductor products. This strategic positioning is crucial as multinational companies seek to diversify their supply chains in response to global uncertainties.”

He expressed optimism about Malaysia’s potential to solidify its position as a leading semiconductor manufacturing hub. “With the right policies, investments, and collaborative efforts, Malaysia has the potential to achieve its ambitious growth targets for the industry,” Wong said.

Source: The Sun

MSIA president: Malaysia must enhance capabilities across semiconductor value chain

The Malaysian semiconductor industry could benefit from a second Donald Trump US presidency, according to Public Investment Bank Bhd (PublicInvest).

The research firm said that increased geopolitical tensions might drive more semiconductor companies to relocate to Malaysia, thanks to the country’s neutral position in the region and its strong semiconductor supply chain combined with cost advantages.

“To mitigate the potential risk of trade sanctions, we gather that more semiconductor customers plan to adopt the China + 1 and Taiwan + 1 policies by setting up a new footprint elsewhere.”

“Under the Trump government, we believe more restrictions will be imposed on US customers who source equipment from China, and also a steep rise in tariffs, which will make China’s imports more expensive,” it said.

PublicInvest said to address potential risks, US-China business partners might move their production lines and orders to a third country, which could benefit local players through increased orders and technology transfers from these multinational corporations (MNCs).

Additionally, the firm anticipated a renewed interest in local technology companies as valuations become more appealing, following a week of profit-taking in the sector.

“As we gather more positive guidance from respective management, we expect to see better financial performance in the second quarter, followed by strong momentum in the second half.”

“However, more volatility is also expected in tech stocks ahead of the US presidential election and the timing of interest rate cuts,” PublicInvest said.

Moreover, it mentioned that Nvidia’s release of its new Blackwell GPUs, combined with the rapid growth of large language models, is expected to transform nearly every industry and create new opportunities for local technology companies.

The firm continues to have an ‘Overweight’ rating on the technology sector, highlighting Inari Amertron Bhd, D&O Green Technologies Bhd, and QES Group Bhd as its top recommendations.

Source: NST

A Trump presidency could benefit Malaysian semicondcutor industry – analyst

Chery’s substantial investment of over RM1 billion in Malaysia signifies a bold departure from past strategies as it chooses to make a significant independent market entry, eschewing reliance on distributors.

The Chinese carmaker’s comeback effort to establish Malaysia as a pivotal Asean automotive hub for local and export markets could benefit notable automotive parts manufacturers such as Feytech Holdings Bhd and DRB-HICOM Bhd.

Affin Hwang Capital automotive analyst Afifah Ishak said Chery was targeting the right-hand drive of both the local and export markets including Singapore, Thailand, Brunei and Australia.

The plan kicks off with an estimated 500 units of Chery models for export in 2024, with the carmaker expecting a three-year compounded annual growth rate of 189 per cent to 12,000 units in 2027.

“We believe that Chery Malaysia’s position is solid, on the back of the recent establishment of its own CKD plant and the appointment of large dealers’ networks across each state in Malaysia,” said Afifah, who visited Chery’s first local CKD plant in Shah Alam recently.

The plant was developed at a cost of RM125 million which began operations in June this year, five months after construction commenced.

It includes a training centre, an R&D centre and the final assembly line for the Jaecoo J7 SUV which is assembled in two variants – the 2WD and AWD with prices ranging between RM138,000 and RM148,800.

The plant has an annual production capacity of 35,000 units and is currently operating at a 50 per cent utilisation rate.

Existing assembly plant in Kedah still producing

Chery’s existing assembly at the Inokom plant in Kulim, Kedah still continues, focusing on four of its SUV models – Omoda 5, Tiggo 8 Pro and the newly-launched Tiggo 7 Pro, and Omoda E5 electric vehicle.

“We understand that Chery plans to expand its capacity at the Inokom plant, to cater to the assembly of its newly-launched models. Nevertheless, we believe that the capacity expansion would take some time to materialise as Chery enters the Inokom plant without any equity stake.

“Hence, it is likely to have a lower priority compared to other auto players with equity ownership

in the plant, such as Sime Darby Bhd (51 per cent stake), Bermaz Auto Bhd (29 per cent stake),

Hyundai Motor Company (15 per cent stake) and Sime Darby Hyundai (5.0 per cent stake),” Afifah noted.

Currently, Chery’s annual production capacity at the Inokom plant stands at 6,000 units, which accounts for about 15 per cent of Inokom’s overall annual production capacity of 38,000 units.

Multi-brand strategy

Chery adopts a multi-brand strategy by introducing its sub-brands in Malaysia, said Afifah.

It began with the introduction of Omoda and Tiggo in July 2023, followed by the upcoming launch of Jaecoo in July this year.

Additionally, another sub-brand, Exceed, is expected to launch by 2027.

However, Jetour, despite being under the umbrella of Chery International, is expected to enter the Malaysian market in the second half of 2024 and operate as a distinct entity with its own separate management team, independent from Chery Malaysia.

“The multi-brand strategy is a common approach among Chinese automotive companies, typically executed through the creation of separate sub-brands or partnerships with third parties to develop new brands,” Afifah said.

Chery initially marked its first presence in Malaysia back in 2005 through Chery Alado as its authorised distributor, offering both CBU and CKD lineups.

The CKD models were locally assembled at Oriental Assemblers Sdn Bhd’s plant in Johor. However, Chery’s last operation in Malaysia was in 2017 which struggled with overall sales of only 137 units.

Leveraging Chery’s Asean ambition

Automotive parts suppliers are set to gain from Chery’s efforts to position Malaysia as an Asean automotive hub.

Afifah said Chery’s ongoing CKD assembly expansion for local and export markets has resulted in a noteworthy achievement of 57 per cent localisation of automotive parts through collaborations with 15 local vendors.

This surpasses the required 40 per cent under the National Automotive Policy 2020.

“We gather that key automotive parts suppliers such as Feytech Holdings, APM Automotive Holdings Bhd and DRB-HICOM are integral to Chery Malaysia’s supply chain,” she said.

Source: NST

Chery embarks on ambitious plan

Developing advanced steel-making capacities is crucial for ensuring domestic iron and steel supply, reducing import reliance and generating forex earnings 

MALAYSIA’S iron and steel industry is an important sector that supports the nation’s infrastructure development and economic growth. 

Among the major players are Alliance Steel (M) Sdn Bhd, Amsteel Mills Sdn Bhd, Ann Joo Resources Bhd, Eastern Steel Sdn Bhd, Malay- sia Steel Works (KL) Bhd and Southern Steel Bhd. 

These companies produce a variety of steel products, including rebar, steel wire rods, sections, and structural components. These products are crucial for the construction of buildings, bridges, roads, railways, and other civil engineering projects. 

Evolution of the Steel and Iron Industry

According to the 15th Report on the Status & Outlook of the Malaysian Iron and Steel Industry 2024/2025, the local iron and steel industry has significantly influenced the nation’s economic and industrial development since 1957. 

The development of advanced steel-making capacities is crucial for ensuring iron and steel supply and to reduce import reliance and generate foreign exchange (forex) earnings. 

In 2023, Malaysia’s basic metals industry employed 112,157 people which accounts for 4.7% of the total manufacturing employment. 

Basic metals account for 2.5% of GDP, significantly impacting construction and manufacturing industries whereas iron and steel exports account for 2.4% of total manufactured goods. 

In 2016, the Malaysian iron and steel industry showed signs of recovery due to China’s “Blue Sky” policy, which reduced production capacities and imposed stricter green regulations on steel producers. 

As the domestic market normalised, efforts were refocused on strengthening the nation’s steel capabilities, particularly within South-East Asia. 

In May 2018, China introduced ultra-low emission standards for steelmakers. Despite China’s actions, the rationalisation move prompted an increase in outward investment driven by Chinese steelmakers, particularly in South-East Asia. 

In April 2019, the Malaysian iron and steel industry players collaborated to submit a White Paper to the Investment, Trade and Industry Ministry (MITI) demonstrating the government’s commitment to working with all segments of the industry to ensure its sustainability. 

On the other hand, the industry faces overcapacity issues and low utilisation rates, with global steel consumption declining in 2022. 

MITI has imposed a two-year moratorium on the expansion and diversification of the steel-making industry, effective Aug 15, 2023. 

The ministry also aimed to collaborate with the Malaysian Iron & Steel Industry Federation (MISIF) and the Malaysia Steel Association to formulate the Green Transition Roadmap for the Iron and Steel Industry. 

Moving forward, the sector will undergo a significant transition towards a sustainable and low-carbon economy through the National Energy Transition Roadmap, Hydrogen Economy and Technology Roadmap, Petronas Hydrogen Plan and Tenaga Nasional Hydrogen Vision. 

National Infrastructure and Challenges

HSBC Bank Malaysia CEO Datuk Omar Siddiq said the Malaysian steel industry is integral to national infrastructure projects as it provided essential materials for construction and development. 

“These steel products would form the backbone of infrastructure construction, used in buildings, bridges, roads, railways and other civil engineering projects,” he told The Malaysian Reserve (TMR). 

A new flat steel producer is set to start production in the second half of 2024, which is expected to transform the Malaysian steel industry. 

However, he warned that Malaysia faced significant challenges in expanding its market share in the global steel market, primarily due to fierce competition from established steel-producing nations such as China, Japan, South Korea, Vietnam and Indonesia. 

These countries benefit from economies of scale and strong export networks, posing challenges for Malaysia in terms of pricing and production volume. 

Omar said in 2023, Malaysia’s steel industry saw total exports valued at RM30.4 billion, predominantly comprising fundamental grade steel. 

Regardless, there is a promising opportunity for industry players to commence regional exports of higher-grade steel by the end of this year. 

He said leveraging free trade agreements such as ASEAN Free Trade Area, Regional Comprehensive Economic Partnership and Comprehensive and Progressive Agreement for Trans-Pacific Partnership could strengthen supply chains and provide broader market access within ASEAN and beyond. 

MISIF president Datuk Lim Hong Thye expressed hope that the government would prioritise and expedite the necessary infrastructure projects. 

“We are looking forward to infrastructure projects such as the Mass Rapid Transit and Light Rail Transit (LRT) project in Penang and hopefully, there will soon be either Bus Rapid Transit (BRT) or LRT launched in Johor,” he said in his speech at the launch of MISIF’s 15th report. 

The report further showed that the industry faced structural challenges such as overcapacity, low green technology adoption, limited scrap access, low research and development investment, insufficient financing and a low-skilled workforce. 

The absence of a green shift increases the risk of stricter regulations which could further pressure profit margins and hinder investment. 

Due to China’s decarbonisation efforts in steel production, ASEAN region including Malaysia has faced overcapacity issues. 

This excess steel production has impacted domestic producers, especially during weakening domestic demand and uneven global economic growth. 

However, the steel industry’s CO2 emissions continue to rise, highlighting the need for green technology adoption. 

“Failure to keep pace with these developments could lead to increased trade barriers and competitiveness challenges,” the report added. 

Global Disruptions, Technological Advancements and Initiatives Omar noted that geopolitical tensions have influenced regulatory policies and government interventions, affecting operational strategies and business planning within Malaysia’s steel industry. 

“Malaysia can mitigate dependency on traditionally affected regions by leveraging FTAs which enables Malaysia to diversify its export markets and explore emerging regions while promoting green steel production,” he said. 

However, according to the report, challenges for moving to green solutions included limited technology availability and high integration costs. 

Financing for green technologies also presented challenges due to traditional mechanisms not aligning with long-term investment horizons and risk profiles, which requires a major reorientation of capital and financial flows. 

In turn, it makes it necessary for financial institutions to explore innovative financing approaches to support the green transition for businesses. 

On the other hand, the green transition necessitates the development of skilled personnel capable of not only operating but also innovating and optimising green technologies. 

Omar said initiatives were put in order, focusing on reducing energy consumption per unit of steel produced, upgrading equipment, optimising operations and implementing energy management systems. 

He also told TMR that the industry is currently exploring hydrogen steel-making and carbon capture, utilisation and storage as these technologies mature. 

He said the future outlook for Malaysia’s iron and steel industry looks promising, driven by factors such as infrastructure development, technological advancements and strategic initiatives. 

Omar added that government policy intervention is essential to ensure the sustainability of the industry and fair trade. 

For that, an independent committee for Malaysia’s iron and steel industry has been formed under the guidance of MITI to evaluate and recalibrate its trajectory towards fulfilling the objectives outlined in the New Industrial Master Plan 2030. 

The committee, which Omar chairs, comprises industry experts such as Taylor’s University professor Dr Ong Kian Ming; South-East Asia Iron and Steel Institute’s secretary general Yeoh Wee Jin; Khazanah Nasional Bhd chief investment officer Datuk Hisham Hamdan and several others. 

Industry Performance 

Based on MISIF’s report, Malaysia’s apparent steel consumption increased by 4.5% in 2023 to 7.9 million metric tonnes (MT) for the third consecutive year, driven by improved finished steel production and higher imports. 

Despite this growth, the capacity utilisation rate remained low at 39.1%, while exports of iron and steel products increased by 14.5%. 

Iron and steel exports went up 14.5% to 8.2 million MT last year, with Turkiye (1.2 million MT), Hong Kong (1.04 million MT) and Singa- pore (996,093 MT) as major markets. 

Furthermore, Malaysia’s top iron and steel imports are China (2.04 million MT), Taiwan (921,860 MT) and Vietnam (825,952 MT). 

On a global scale, China remains the top 3 exporter for 2022 with 68.1 million MT, followed by Japan (31.7 million MT) and South Korea (25.5 million MT). 

Lastly, the US is the top importer globally with 28.9 million MT, followed by Germany (21 million MT) and Italy (20.2 million MT). 

MITI Deputy Minister Liew Chin Tong explained that the steel industry is exploring various measures to advance towards a green and sustainability agenda, aiming to ensure progress. 

The next level of decarbonisation requires a comprehensive approach from the government, considering not just the steel industry but the entire ecosystem. 

Liew said Malaysia’s decarbonisation process is influenced by the European Union’s (EU) Carbon Border Adjustment Tax (CBAT), which will be imposed effective Jan 1, 2026. 

Through this policy, either Malaysia or the EU collects carbon tax on the products it exports to them. 

However, this will take some time for Malaysia to implement the carbon tax. 

“The process is that we will have to first price carbon, then only we can start trading carbon. 

“Once we trade carbon then we can discuss the potential of taxing carbon,” Liew said. 

Source: The Malaysian Reserve

Mapping Malaysia’s steel sector journey

A robust domestic semiconductor industry, nurtured by the National Semiconductor Strategy (NSS), can reduce reliance on imports and strengthen the automotive supply chain, said the Malaysia Automotive, Robotics and IoT Institute (MARii).

Its chief executive officer, Azrul Reza Aziz said electric vehicles (EVs) rely on semiconductor components for critical functions, such as battery management and onboard computing, among others.

“Hence, supply chain development is crucial for supporting the production and assembly of EVs,” he told Bernama.

For instance, a hybrid car typically requires around 1,500 microchips, while EVs may require at least 3,000 chips per car, sourced from the electrical and electronics (E&E) sector.

“Phase 1-3 of the NSS, which emphasises advanced chip manufacturers to become cutting edge companies, will enable our local automotive suppliers to be more innovative in product developments.

“This ensures that their products have aspired to support the local EV manufacturers and industry in Malaysia, which will boost the overall automotive industry,” Azrul Reza said.

On May 28, 2024, the NSS, announced by Prime Minister Datuk Seri Anwar Ibrahim, consists of three main phases.

Phase 1 will focus on domestic direct investment focusing on integrated circuit design, advanced packaging and manufacturing equipment, while foreign direct investment will emphasise wafer fabs and manufacturing equipment. 

Meanwhile, in Phase 2, Malaysia is to establish at least 10 local companies in the design and advanced packaging sector with revenues of between RM1 billion and RM4.7 billion.

Phase 3 will focus on supporting the development of world-class Malaysian semiconductor design, advanced packaging and manufacturing equipment firms while attracting buyers of advanced chips.

NSS enhances EV ecosystem

Azrul Reza said the NSS will enhance the ecosystem and uplift the capabilities of the local automotive suppliers and every policy has identified the required support to ensure high value-added activities are conducted by the local industry and produce world-class goods for the global market.

“NSS, in particular, has outlined the targets that our local automotive supply chain may embark on or expand in the E&E sector, such as establishing 100 semiconductor-related companies, developing Malaysia as a global research and development hub for semiconductors, and training and upskilling 60,000 highly skilled Malaysian engineers.

“Therefore, the NSS will offer vast opportunities for local automotive vendors to participate and arise as suppliers to the emerging new vehicles coming ahead,” he said.

As the world’s sixth-largest exporter of semiconductors, Azrul Reza said Malaysia has begun attracting higher-value investments in front-end activities including integrated circuit design, wafer fabrication, and advanced packaging, together with semiconductor machinery and equipment manufacturing.

Malaysia has drawn attention from industry giants like Intel, GlobalFoundries, Infineon and Neways. This will eventually elevate the country’s position in the global value chain, he said.

“Concerning the automotive industry, we do see bright prospects. The growth in this industry will be supported by regional trends that promote economic growth and ecosystem development, consumer demand, as well as the introduction of exciting, new models by original equipment manufacturers.

“The magnitude of importance for semiconductors towards the growth of EVs remains crucial as Malaysia has set a target to achieve 20 per cent of xEVs which includes hybrid, plug-in hybrid EV (PHEV), battery electric vehicle (BEV) and fuel cell electric vehicle (FCEV) of total industry volume (TIV) by 2030, with the current achievement of 4.95 per cent of TIV in March 2024,” Azrul Reza said.

Source: Bernama

Robust semiconductor sector reduces reliance on imports, boost automotive supply chain