The world is highly connected and the supply of goods criss-crosses the globe via logistical planning like clockwork. But world events have thrown a spanner in the works, causing supply-chain disruptions that have a great impact on economies. With China — a key manufacturer — mired in the ongoing China-US trade war, it has been challenging for companies to export their goods.

In JLL’s “Beyond China: Asia’s next manufacturing powerhouse” report released in May, the global real estate services firm reveals that India and Southeast Asia (SEA) nations — namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam — that can mitigate and benefit from this situation.

“Over the past few years, companies have begun exploring the relocation of manufacturing outside of China. In Asia-Pacific, this near/re/friend-shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruption by reducing reliance on a single country,” JLL says in a press statement on the report.

Nearshoring is the practice of transferring a business operation to a nearby country, especially in preference to a more distant one. Reshoring, on the other hand, is the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated. Friendshoring refers to the practice of locating parts of a company’s supply chain or manufacturing process to countries that are political or economic allies of the country where the company is based.

“Diversification within supply chains is a natural step for companies involved in manufacturing within the wider economic lifecycle of this region. We see Southeast Asia and India representing a natural complement to the existing production strength of China but feel that for companies to respond quickly to supply chain shifts, they need to adopt a flexible mindset towards land selection and funding options,” says JLL Asia-Pacific head of manufacturing strategy Michael Ignatiadis.

However, the report cautions companies from leaping on the bandwagon as they need to be able to adapt quickly given the ongoing volatile landscape.

“Land selection and the capital used will be key in determining success factors for companies. Alternative funding and new leasing options are becoming more readily available. These are enabling manufacturers to set up quickly and to pivot as needed if and when global trade and supply chains shift again,” the report says.

JLL notes that the nations in the report have strong fundamentals, which is why they are considered by companies to set up their manufacturing operations. “These fundamentals include a large population and labour pool, favourable costs and various incentives. From a manufacturing investment perspective, these factors position SEA and India as major manufacturing hubs for global markets.”

Another reason companies are looking elsewhere is also due to rising costs in China compared with SEA and India. Apart from the financial aspect, the report highlights, “Factors such as skilled labour, infrastructure, environmental regulations, proximity to suppliers and customers, and political stability contribute significantly to a factory’s long-term success and sustainability.”

Careful consideration of both financial and non-financial factors, as well as a country’s inherent benefits, is necessary to make an informed decision, JLL says.

Opportunities for Malaysia

The report points out opportunities for Malaysia and also the areas and the policies that are encouraging growth in the manufacturing sector. The industries where opportunities lie are rubber, machinery and equipment (M&E), food, chemical, transport, and electronics and electrical (E&E).

In the press statement, JLL Malaysia head of research and consultancy Yulia Nikulicheva says, “Malaysia’s manufacturing sector has attracted a significant amount of foreign direct investment in recent years, particularly in the E&E segment. The country is home to six of the top 12 semiconductor manufacturers, contributing to 7% of Malaysia’s GDP (gross domestic product). Additionally, Malaysia ranks seventh globally in E&E exports. Other sectors such as pharmaceuticals, chemicals, and machinery and equipment are also experiencing increased investment volume.”

For the rubber industry, the report says, “Malaysia plays an important role in the rubber industry in SEA. It is also the sixth-leading producer of natural rubber in APAC (Asia-Pacific)”.

The key products include gloves, tyres, thread, automotive components and seals and O-rings.

The M&E industry has huge potential. From January to July 2022, Malaysia saw an increase of 25.5% in M&E exports totalling US$8.34 billion year on year, JLL reports. The key products here are industrial machinery, electrical equipment, and construction and mining machinery.

For the food industry, JLL says, “Malaysia wants to be one of the largest global suppliers of halal products. The Global Islamic Economy Indicator forecasts that the global halal market will expand from US$2.09 trillion in 2021 to almost US$3.27 trillion by 2028.” Food products include processed and canned foods, dairy products, beverages and snack foods.

The chemical industry contributes 6% to Malaysia’s GDP, according to JLL, and employs 292,969 workers, making up 12.5% of the total manufacturing employees. Products include petrochemicals, oleochemicals, plastics and polymers, and agrochemicals.

As for the transport industry, JLL highlights, “Malaysia has attracted many global automotive manufacturers to operate their flagship facilities in the country, including the first Porsche assembly plant outside of Germany, several regional distribution centres such as Volkswagen, Mercedes-Benz, BMW and Volvo’s regional EV (electric vehicle) hub. Other manufacturers like Proton, Perodua and Honda have also established manufacturing facilities in Malaysia, which is poised to become a regional hub for the EV industry.”

Products include automobiles, motorcycles, commercial vehicles, and EVs and components.

Lastly, for the E&E industry, JLL says, “Now one of the largest export-oriented industries in the country. It contributes 38% to Malaysia’s total exports and 78% to the net trade surplus.”

The key products include consumer electronics, electrical appliances, electronic components and semiconductors.

Key industrial areas; supportive policies

JLL highlights several key industrial clusters, mainly in Peninsular Malaysia, namely in Penang, Greater Kuala Lumpur and Johor.

In Penang, the key industries there include E&E, pharmaceutical, and machinery and equipment. The Penang Port and Penang International Airport are the two export/import hubs.

For Greater Kuala Lumpur, E&E, machinery and equipment, automotive, and food and beverage are key industries. Port Klang, Kuala Lumpur International Airport and Sultan Abdul Aziz Shah Airport are key transport hubs, JLL highlights.

Lastly, in Johor, key industries include automotive and logistics, with Port of Tanjung Pelepas, Johor Port and Senai International Airport being key hubs.

Policies that are supporting and providing direction within the industrial sector include the New Industrial Master Plan 2030 (NIMP 2030), the 12th Malaysia Plan and the National Fourth Industrial Revolution (4IR) Policy.

NIMP 2030 is a master plan that lays out the course for Malaysia from 2023 to 2030 to keep the country’s manufacturing industry and related services competitive globally.

“The NIMP 2030 aims to capitalise on rising global trends, supply chain disruptions, the present geopolitical scenario, digitalisation, and environment, social and governance (ESG) considerations,” JLL says.

At the same time, the 12th Malaysia Plan from 2021 to 2025 outlines the country’s commitment to achieve net zero greenhouse gas emissions by 2050. According to JLL, Malaysia holds the top ranking in SEA in the Energy Transition Index (World Economic Forum).

Lastly, 4IR looks to “increase manufacturing productivity; elevate the contribution of the manufacturing sector to the economy; strengthen innovation capacity and capability; and increase the number of high-skilled workers”.

These policies and initiatives provide a framework to work towards, and Malaysia looks to be in a good position to capitalise on the industrial needs of global players.

Source: The Edge Malaysia

Manufacturing opportunities for Malaysia

The number of electric vehicle (EV) charging stations nationwide increased by 12.5 per cent as of June 25, compared to the first quarter of this year, driven by the government’s efforts to reduce bureaucratic hurdles in the installation process.

Investment, Trade, and Industry (Miti) Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that previously, approvals involved numerous agencies and ministries, including the Energy Commission, the local authorities, and the Fire and Rescue Department.

“The increase over the past two to three months has been significant. Initially, there were approval challenges, but meetings chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof successfully streamlined the process.

“We now have a one-stop centre to speed things up,” he said after officiating the 2024 Ipoh Barat Umno Division Delegates Meeting today.

Tengku Zafrul added that the government is maintaining its target of having 10,000 EV charging stations nationwide, and raised the target for Direct Current (DC) Fast Charging units from 1,000 to 1,500 this year.

“While DC chargers are costlier to install, they are essential due to high demand from the public,” he said.

The Low Carbon Mobility Action Plan 2021-2030, announced in 2020, aims to establish 10,000 EV chargers by 2025, comprising 9,000 Alternating Current chargers and 1,000 DC chargers.

According to Miti, 2,585 EV chargers have been installed nationwide as of June 25, excluding the Federal Territory of Labuan.

Source: Bernama

Cutting red tape drives EV charging stations’ growth — Minister

Property developer GD Group has ventured into industrial park development, launching the Sikamat Industrial Park in Vision Valley 2.0, Negeri Sembilan.

The Sikamat Industrial Park aims to accommodate a diverse range of industries that offers modern infrastructure, strategic connectivity and a business-friendly environment, said GD Group in a statement.

The development project focuses on environmental, social and governance (ESG) principles, advanced infrastructure and a commitment to sustainability. It also seeks to foster international collaboration and economic growth through a strategic partnership with Foshan, China.

“Our vision is to strengthen ties between Majlis Bandaraya Seremban and Foshan,” GD Group said.

“Our mission is to develop a state-of-the-art industrial complex that supports seamless cross-border business operations, leveraging robust infrastructure and strategic support to facilitate the flow of Southeast Asian products into China, reaching a market of 1.4 billion people,” it added.

Additionally, the Sikamat Industrial Park comprises infrastructure-ready lands providing investors with flexible options to suit diverse industrial requirements, prepared for immediate development.

The development includes 20 semi-detached factory units and 40 double-storey commercial shop lots.

“We are excited to embark on this journey with Sikamat Industrial Park,” said GD Group deputy chairman Datuk Wong Seng Tong in the statement.

“This development not only represents our commitment to foster economic growth but also Malaysia’s strategic importance in the global trade arena,” he added.

Source: The Edge Markets

GD Group launches Sikamat Industrial Park in Negeri Sembilan

The impressive growth of Malaysia’s healthcare industry has solidified the country’s position as a key player in the global market, said Malaysia External Trade Development Corporation (Matrade) chairman Datuk Seri Reezal Merican Naina Merican.

He said this year, Malaysia’s medical device sector is expected to contribute US$4.19 billion (RM19.7 billion) to the economy, while the pharmaceutical segment has already added over US$1.26 billion to the national GDP.

“Last year, Malaysia’s total trade in the healthcare industry was valued at US$11.1 billion with exports of healthcare products amounting to US$6.81 billion, and total imports totalling US$4.29 billion.

“This impressive performance underscores

Malaysia’s significant contribution to the global healthcare industry and highlights the robust growth and potential of our healthcare sector,” he said in his opening remarks at the Malaysian International Healthcare Forum during the International Healthcare Week (IHW 2024) in Bangkok on Thursday.

Reezal Merican said Malaysia’s medical device industry employs over 13,000 individuals, and the pharmaceutical industry provides jobs for almost 30,000 people.

He said these employment opportunities drive economic growth and enhance the quality of life for many individuals.

“With Malaysia’s advanced infrastructure, which includes top-notch sterilisation services, precise engineering capabilities, and renowned research institutions, we are dedicated to positioning the medical devices and pharmaceutical industries as pivotal pillars of the nation’s manufacturing sector.

“The government actively promotes Malaysia as a regional manufacturing hub for medical devices, underpinned by a stable industry ecosystem, a robust talent pool, a resilient financial sector, a strong legal framework, and globally integrated logistics systems – positioning Malaysia as a centre of excellence,” he said.

Reezal Merican said Malaysia is a leading global producer of rubber-based medical consumables and is recognised as one of the best nations in the world for healthcare.

He said Malaysia holds the title of the largest market for medical devices in Asean and is actively participating in free trade agreements (FTA) to strengthen its position in the healthcare industry.

“With 16 FTAs, including the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, we facilitate seamless trade and investment flows, integrating Malaysia more deeply into the global supply chain and driving economic growth,” he said.

For IHW 2024, the 10 participating Malaysian companies are exhibiting a wide range of products including clean room manufacturing, air ventilation systems, smart sensors for data loggers, syringes, blood collection tubes, electric potential therapy devices, collapsible tubes, disposable tourniquets, and in-vitro diagnostic rapid test kits. 

Source: Bernama

Medical device sector to contribute RM19.7b to M’sian economy

Colform Group Bhd, a Sabah-based manufacturer of steel roofing, steel cladding and other related steel products, has filed for an initial public offering (IPO) on the ACE Market to raise funds to set up a new colour coil coating production line, to build a new storage facility, and to expand its business to Peninsular Malaysia.

The proposed IPO will involve a public issue of 114.42 million new shares and an offer for sale of 54 million existing shares at a price to be determined later, according to its draft prospectus. Altogether, the listing will offer investors up to a 28.07% stake in the company, based on its enlarged share capital of 600 million shares post-IPO.

Under the public issue, Colform will make 30 million new shares available for the Malaysian public and set aside six million new shares for eligible persons. The company will also sell 3.42 million new shares to select investors through private placement, and 75 million new shares to select Bumiputera investors approved by the Ministry of Investment, Trade and Industry.

Proceeds from the offer-for-sale of existing shares will accrue entirely to the selling shareholder, Kang Ming Trading Sdn Bhd, which will cut its holdings in the company from 98.68% to 70.86% post-IPO.

Kang Ming Trading is owned by the Kang family, under the patriarch Kang Ah Hin. He holds 15% in Kang Ming Trading while his wife Chu Nyuk Moi owns 10%. Kang is a non-independent non-executive director of Colform.

The remaining shares in Kang Ming Trading are held by siblings Kang Ket Hung (25%), who is also the managing director of Colform, Kang Phui Ting (15%) and Kang Phui Yie (20%), who are both non-independent executive directors in Colform, as well as Kang Ket Hao (15%).

Through its subsidiaries, Colform is principally involved in the manufacturing, processing and trading of steel products, as well as the trading of building materials.

From the proceeds of the IPO, Colform intends to buy new machinery to set up a new colour coil coating production line at its factory in Kota Kinabalu. “The new colour coil production line will complement and expand our group’s existing range of steel products to include colour coated coils as we currently do not manufacture colour coated coils and only purchase colour coated coils from our suppliers,” it said.

In anticipation of the additional storage space needed to store raw materials and finished products of the new colour coil coating production line, Colform plans to build a new storage facility right beside its factory in Kota Kinabalu. The new facility is estimated to have a built-up area of 40,000 sq ft.  

Lastly, the group plans to set up a branch office and lease a factory in the Klang area to expand its business in Peninsular Malaysia, where it has no presence currently.

Mercury Securities Sdn Bhd has been appointed the principal adviser, sponsor, underwriter and placement agent for the IPO.

Source: The Edge Malaysia

Sabah-based steel products manufacturer Colform Group files for ACE Market IPO

The rising global demand for electric vehicles (EVS), which will drive higher light emitting diode (LED) demand, bodes well for LED manufacturer D&O Green Technologies Bhd.

The global push towards achieving net-zero carbon emissions is driving demand for EVS, which require a greater number of LEDS compared to conventional vehicles.

Global automakers are also increasingly incorporating more LEDS into their new models to differentiate themselves from consumers through advanced design and enhanced safety features.

Phillip Capital Research said it projects a three-year net profit compounded annual growth rate of 55% for D&O.

It said this would be underpinned by the increases in the global car and EV sales, the rising adoptions of LEDS in new car designs, further gains in the global market share, margin expansions on the rising Smart LEDS contributions and stronger operating leverage.

The company plans to expand its existing capacity by 35% to accommodate the higher anticipated orders.

The research house said Smart LEDS would also become a significant growth driver for D&O, which is expected to account for 19% of the group’s revenue by 2026.

D&O ranks among the top global LED manufacturers, specialising in high-performance lighting solutions for automotive applications, including headlights, taillights and ambient lighting.

The brokerage said it is initiating coverage on D&O with a “buy” rating and 12-month target price of RM4.80, based on a 40 times price-earnings multiple or minus 0.5 standard deviation of its five-year historical mean on its 2025 estimated earnings per share.

“We like D&O for its strong global presence in the automotive LED segment, deep ties to reputable automotive global brands, innovative product lineup driving market share growth and attractive earnings prospects.

“Downside risks include a high concentration on China’s automotive market, the strengthening of the ringgit and the shift from LED lighting to other lighting technologies,” it added.

Source: The Star

D&O to benefit from demand for EVs and LEDs

The Sarawak government is determined to diversify, evolve and embrace high-end industries in Sarawak, said Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He said this is in view of the state’s strength in energy generation.

He pointed out that the state has set a target to produce 10 gigawatts (GW) of energy via its abundant indigenous resources by the year 2030.

“At the moment, we have an installed capacity of around 5,700 megawatts (MW) and within these three years, we want to upgrade to 10GW.

“I together with my Cabinet are going to the ground to explore various technologies that can generate renewable energy as the strength for us to provide the required energy in all economic activities,” he said when officiating the grand opening of global microelectronics engineering company Melexis wafer testing site facility at Sama Jaya High-Tech Park here today.

He shared that the state is currently running an experiment to install floating solar panels in Batang Ai which occupied only three per cent of the water bodies and is able to produce 50MW of power.

“Assuming that we can install the floating solar panels on 60 per cent of water bodies, we can produce around 2,000MW and this can be dedicated to industries in Sama Jaya,” he said.

On Melexis, Abang Johari said the company’s collaboration with Sarawak Semiconductor Design (SMD) and X-FAB will create an ecosystem in the chain of high-tech devices.

“In 2022, Sarawak made a significant step by working together with Melexis through the collaboration with SMD in hopes that we can produce designers that are able to adjust and align themselves to the modern advancement in chip technology.

“With the development of artificial intelligence (AI), interactive AI and generative AI, these all depended on how the chips are designs and produced that will give strength to the devices with chips embedded in them.

“In this respect, it is the desire of the Sarawak government that we work together and whatever strength that we have, we will share it with you (Melexis) and whatever strength that you have, you share with us,” he said.

He congratulated Melexis on the opening of its new facility here, which is the largest wafer testing site worldwide.

“We hope that this collaboration will move us forward in becoming players in the global microelectronic chain,” he said.

The new Melexis facility here signals Melexis’ commitment to meeting the increasing demand for semiconductors and strengthening its presence in the Asia-Pacific region. Its expansion in the country marks a significant milestone in the company’s 35-year journey to fulfill the growing global demand for semiconductors, which is expected to double in the next decade.

Also present at the ceremony were Deputy Premier Datuk Amar Dr Sim Kui Hian, Education, Innovation and Talent Development Minister Dato Sri Roland Sagah Wee Inn, Deputy International Trade, Industry and Investment Minister Datuk Dr Malcolm Mussen Lamoh, Deputy Education, Innovation and Talent Development Minister Datuk Francis Harden Hollis, Belgium ambassador to Malaysia Peter Van Acker, and Melexis chairwoman Francoise Chombar.

Source: Borneo Post

Premier: Sarawak govt aims to boost high-end industries by harnessing on state’s strength in renewable energy

Belgium-based semiconductor solutions provider Melexis NV has opened its largest wafer testing site worldwide in Sama Jaya High Tech Park in Kuching, Sarawak, as part of its commitment to meet the increasing demand for semiconductors and strengthen its presence in the Asia-Pacific region.

The new facility in the capital of Sarawak, which is located next to one of its key suppliers X-FAB’s wafer foundry, will streamline its logistics and help to reduce its ecological footprint. The company hosts 90 semiconductor wafer test equipment used to test integrated circuits.

“Kuching boasts a diverse, multilingual, entrepreneurial and skilled workforce, further enhancing recruitment potential,” Melexis said in a joint statement with the Malaysian Investment Development Authority (Mida) and Sarawak’s Ministry of International Trade, Industry and Investment (Mintred).

“This expansion will allow Melexis to serve the steadily increasing global demand for semiconductor solutions and signals our continued commitment towards our Asian customers,” Melexis chairwoman Françoise Chombar said.

The new four-storey building, designed by award-winning Belgian architect Sebastian Mortelmans and Sarawakian architect Design Network Architect (DNA), covers a ground surface of 4,500 sq m, with a modern design that references Sarawak’s longhouse architecture.

Melexis chief executive officer Marc Biron said that the investment, which amounts to €70 million (approximately RM356.32 million), underscores the ambition of Melexis and will ensure future growth.

Apart from the facility, Melexis is also collaborating with universities and Sarawak Microelectronics Design, a government agency focused on research and development that officially began in 2023 through the Local Pioneer Talent Programme.

Meanwhile, Minister of Investment, Trade, and Industry Tengku Datuk Seri Zafrul Abdul Aziz said the opening of Melexis’ largest global wafer testing facility in Sarawak reflects Malaysia’s strong execution of investment projects and further strengthens the country’s position in the global semiconductor supply chain.

“As Melexis helps drive Malaysia’s technological advancement, it will also create significant socio-economic spillover that will benefit the surrounding businesses and communities, contributing to more inclusive and broad-based growth outlined in the New Industrial Master Plan 2030 (NIMP 2030),” he said.

Mintred, on the other hand, commended Melexis’ move to open its facility in Kuching, especially given the state’s business-friendly environment.

“Sarawak government has always been very supportive of investors both foreign and domestic. It is among the most preferred destinations for investment in Malaysia. Sarawak possesses many comparative advantages for businesses to grow and prosper such as strategic location, availability of green energy, talented workforce, and suitable land for industrial activities,” it said.

Source: The Edge Malaysia

Belgium’s Melexis opens its largest wafer testing site worldwide in Kuching

Melexis, a global microelectronics engineering company, has opened its largest wafer testing site worldwide in Kuching, Sarawak.

In a joint statement by the Ministry of International Trade, Industry and Investment  and Melexis, it said the expansion signals Melexis’ commitment to meeting the increasing demand for semiconductors and strengthening its presence in the Asia-Pacific region.

The expansion of Melexis in Malaysia will see it hosting 90 semiconductor wafer test equipment used to test Integrated Circuits (ICs).

It also said that Malaysia stands out as an ideal location due to its geographical, cultural, and economic advantages, to expand Melexis’ footprint in the Asia-Pacific region.

“Both the local Sarawak government and federal Malaysian government actively support initiatives to grow the semiconductor ecosystem,” it noted.

Melexis chairwoman Françoise Chombar mentioned that the company’s ongoing quest for improved solutions brought them to a facility that reflects Melexis’ core values: innovative, compassionate, and mindful of both people and the environment.

“We are proud of how sustainable the building is, having learned from previous experiences. 

“This expansion will allow Melexis to serve the steadily increasing global demand for semiconductor solutions and signals our continued commitment towards our Asian customers,” she said.

Melexis chief executive officer Marc Biron stated that the 70 million euro investment demonstrates Melexis’ ambition and will support its future growth.

“With Melexis, we are at the forefront of innovation, and this opening will support us in the markets that we serve,” he added.

The Minister of Investment, Trade and Industry (Miti) Tengku Datuk Seri Zafrul Abdul Aziz added that the inauguration of Melexis’ largest global wafer testing facility in Sarawak showcases Malaysia’s effective handling of investment projects, reinforcing its global position in the semiconductor supply chain.

“As Melexis helps drive Malaysia’s technological advancement, it will also create a significant socio-economic spillover that will benefit the surrounding businesses and communities, contributing to more inclusive and broad-based growth outlined in the New Industrial Master Plan 2030,” said Tengku Zafrul.

Source: NST

Microelectronics company Melexis opens its largest wafer testing site in the world in Kuching, Sarawak

The development of the Selangor Integrated Circuit (IC) Design Park is expected to help reduce the issue of intellectual migration or ‘brain drain’ in the country’s semiconductor industry, the Selangor State Legislative Assembly (DUN) sitting was told.

Selangor Investment, Trade and Mobility Exco Ng Sze Han said the state government is targeting more locals who have migrated abroad to return and together develop the semiconductor industry because the sector offers higher salaries.

Ng said Selangor is also expected to enjoy various direct return on investment benefits such as foreign investment opportunities from international class semiconductor companies as well as international class venture capital companies to expand the IC design business.

“This includes the opportunity to open a processing factory in Selangor,“ he said in reply to a question from Ong Chun Wei (PH-Balakong) who wanted to know the economic spillover effect on the development of the IC Design Park that will be realised in Selangor at the DUN sitting here today .

In addition, Ng said infrastructure development is able to bring indirect investment returns such as the provision of high-income employment opportunities and local economic development including food and beverage, housing and transportation with the existence of high innovation talents.

He said the establishment of the IC Design Park was an important development in the Malaysian semiconductor industry, reflecting the strategic shift from ‘Made in Malaysia’ to ‘Made by Malaysia’.

“This transition is important because it represents Malaysia’s desire to improve the semiconductor value chain, moving from processes at the back such as packaging and testing, to IC design and innovation at the front (upstream).

“For local semiconductor players, this means greater opportunities to be involved in high-value designs, access to technology and collaboration with global and local technology leaders including MaiStorage which is a subsidiary of Phison in Malaysia, SkyeChip Sdn Bhd and the Shenzhen Semiconductor Industry Association,“ he said.

It was previously reported that the Malaysia Semiconductor Accelerator and IC Design Park: Selangor Hub developed in Puchong is capable of generating economic returns of up to RM1 billion.

Source: Bernama

Development of Selangor integrated circuit design park to help reduce ‘brain drain’

Affin Hwang Investment Bank Research has maintained its “overweight” call on the building materials sector as the economy continues to strengthen in the second half of the year.

In a report, the research house said among the key elements to look out for in the aluminium, tin and cement sub sectors are commodity price movements, potential changes in demand and supply dynamics and levels of economic activity.

“We will also look at potential disruptions in the global supply chain due to logistics challenges, and potential government interference on cement price discounts given to support the construction industry,” it said.

Its top picks are Malayan Cement Bhd and Press Metal Aluminium Holdings Bhd which are expected to continue recording strong earnings, backed by favourable average selling prices (ASP) and input costs.

The research house said for 2024, the 57% year-on-year earnings growth for Press Metal is underpinned by lower input costs coupled with ongoing strength in aluminium prices.

“We also like Press Metal as a beneficiary of an elevated aluminium price environment,” it said.

Additionally, it said Malayan Cement’s earnings are expected to stabilise at the current high base given the industry ASPs coupled with coal prices that are expected to remain subdued.

“Within the sector, we prefer exposure to Malayan Cement, due to the strong margin recognised from the cement price hikes which are likely to remain sticky at current highs, coupled with subdued coal prices,” the research house said.

Its assumptions for Malayan Cement are cement prices at RM380 per tonne.

As for Malaysia Smelting Corp Bhd (MSC), the research house said its operations are unfortunately unable to reap the full benefits of the recent surge in tin prices which was brought about by export constraints by major producers, as this resulted in lower tin tolling business.

Its assumptions for the group are tin prices at US$30,000 per tonne.

Meanwhile, it also noted that both Press Metal and MSC are bound to be negatively impacted by a stronger ringgit, since their products are priced in US dollars.

“The opposite would be the case for Malayan Cement, as its input costs are priced in US dollars. Nonetheless, the sector profitability is also determined by global raw material price movement,” it said.

Some of the downside risks to the sector to look out for will include weakening ASPs, rising raw material prices, and slower-than-expected growth in economic activities such as construction, amongst others.

“On the other hand, escalating raw material costs, electricity, and fuel costs remain downside risks to the sector,” the research house added.

Source: The Star

Strong economy a boon for building materials

The Malaysian government has made the adoption of electric vehicles among the thrusts of its National Energy Transition Roadmap (NETR).

To this end, it is targeting for EVs to account for 15 per cent of all vehicles sold by the year 2030, rising to 80 per cent by 2050.

Here are they ways the government is encouraging Malaysians to pick battery power over petroleum power for their next vehicle purchase.

Import duty, excise exemptions

While EV prices may appear high now, they are lower than they would be if the government had imposed the normal automotive taxes and duties on them. Completely built up (CBU) EVs were granted full import and excise duty exemption for four years from January 1, 2022 to December 31, 2025.

Components for locally assembled EVs are currently fully exempted from an import duty for six years until 31 December 31, 2027.

If they were to be locally-assembled, EVs would enjoy a full exemption of excise duty and sales tax exemption also for six years in the same period.

Road tax exemption

EV owners have been exempt from paying road tax since 2022 and will continue to enjoy this privilege until December 31, 2025.

They will also enjoy a lower tax rate in 2026, after the exemption expires, that will be based on the power output of their EV.

When unveiling the new structure, Transport Minister Anthony Loke said it was 85 per cent lower vis-a-vis petrol powered vehicles.

Subsidy to charging facilities

To encourage the growth of the EV charging network in Malaysia, the government is offering individuals RM2,500 in yearly income tax relief through to 2027 for the installation, rental, and purchase of EV charging equipment or subscription fees.

Electric bikes, too

The government is also offering up to RM2,400 in tax rebates to encourage individuals to adopt electric-powered motorcycles.

However, this incentive has only been announced for the 2024 assessment year and it is only available for individuals earning no more than RM120,000 annually.

Tax incentives for manufacturers

Companies investing in the assembly or manufacturing of energy efficient vehicle (EEV) including hybrids and electric or components for such vehicles are eligible for the following incentives:

Income tax exemption through pioneer status incentive with tax exemption of 70 per cent or 100 per cent on statutory income respectively for a period of five or ten years; or

Equivalent income tax exemption tax investment allowance of 60 per cent or 100 per cent on eligible capital expenditure incurred within five or ten years respectively from the date of the first eligible capital expenditure. This allowance can be deducted up to 100 per cent of the statutory income for each year of assessment.

Boosts for charging operators

Companies investing in green technology services involving EVs such as installation, maintenance, repair of EV charging equipment, EV infrastructure and charging stations are eligible for a 70 per cent tax exemption for three years from the start of their operations.

They are also eligible to receive a Green Investment Tax Allowance (GITA) of 100 per cent of qualifying capital expenditure incurred on green technology projects for the period of 5 years from the date of first qualifying capital expenditure incurred.

Source: Malay Mail

Going EV: What the Malaysian government is doing to charge up the transition

The industrial sector is encouraged to use high-efficiency electric motors to optimise electricity use, providing savings for industry players.

The Energy Commission’s (ST) Energy Efficiency and Conservation Unit deputy director, Zulkiflee Umar, said that based on previous studies, most electric motors entering Malaysia do not meet the required minimum level of electrical efficiency.

“When this component is inefficient, the electricity bill will be high. We want to suggest that one day we make this mandatory to ensure that inefficient electric motors no longer enter Malaysia.

“However, the investment is a bit expensive, but in terms of savings, industry players can enjoy savings of 20 to 40 per cent. For example, if their bill is RM100,000 a month, 40 per cent of savings would amount to RM40,000 a month,” he said.

He said this when appearing as a guest on Bernama TV’s Apa Khabar Malaysia programme titled ‘Anda Jimat, Poket Selamat’ today.

Zulkiflee said the commission also plans to continue the Sustainability Achieved Via Energy Efficiency (SAVE) 4.0 programme in 2025, though it is still in the application process.

Regarding the practice of using electricity for domestic consumers, ST’s Promotions and External Relations Unit deputy director, Veliana Ruslan, said the public can practice prudent electricity use.

Veliana mentioned that practices such as turning off lights, modems, electrical items, and air conditioners when not in use, as well as cleaning electrical items like dusty fans, can increase electrical efficiency and provide consumers with up to 10 per cent savings.

Regarding the Energy Efficiency and Conservation Bill 2023, which was passed in the Dewan Rakyat on June 25, Zulkiflee said the bill aims to promote and regulate the use of energy effectively and comprehensively in Malaysia.

“Alhamdulillah, on June 25, we obtained the approval from the Dewan Rakyat, and now we are in the process of preparing the rules and guidelines that will be gazetted later,” he said.

Source: Bernama

Industrial sector encouraged to use high efficiency electric motors – ST

Selangor recorded a staggering RM100.38 billion in approved foreign investments in the manufacturing sector from 2008 to the first quarter of this year, the State Legislative Assembly heard today. 

According to state executive councillor for investment Ng Sze Han, these investments helped create a total of 169,775 job opportunities in Selangor involving 1,955 approved projects. 

He said these data were obtained from the Malaysian Investment Development Authority (Mida)

“For 2025, Selangor’s investment forecast can only be made after evaluating the current potential investments,” he said. 

Ng was responding to a question from Pandamaran assemblyman Leong Tuck Chee regarding the state’s investments between 2008 to 2024 and its projection for next year. 

Commenting further, Ng said the state investment arm, Invest Selangor Bhd, is currently overseeing 63 foreign investment projects that are in the final phase before proceeding to the lease-purchase agreement process. 

He projects these investments to contribute an additional RM8 billion to the state. 

“These projects have gone through the site visit phase and the total potential investment is approximately RM8 billion.” 

Previously, in March, Mida had said that Selangor recorded RM55.3 billion in total investment last year, exceeding its initial target of RM45 billion. 

It noted that the manufacturing sector saw a marked increase in investment from RM12.2 billion in 2022 to RM19.3 billion in 2023. 

Source: Slenagor Journal

State’s manufacturing sector attracts RM100 bln in foreign investments since 2008

Plastic packaging players in Malaysia are expected to see sustained order growth in the second half of 2024.

This positive outlook is supported by the recovery in manufacturing activity and consumer spending globally, following the restocking by customers during the early part of the year.

Kenanga Research said in a report, the long-term outlook for local plastic packaging companies is also optimistic, as they are poised to gain market share from overseas producers, given local player’s low-cost structure, better economies of scale and product innovation, especially in sustainable plastic packaging material.

The research house has maintained its “overweight” call on the plastic-packaging sector.

“Having experienced a pick-up in orders since the beginning of the year on restocking by stockists and end-users, local players guided for the uptrend to be sustained during the remainder of 2024, backed by the recovery in manufacturing and consumer spending globally,” it said.

“Plastic packaging is widely used across sectors from food and beverage to trading and logistics, and, hence, demand for it hinges on the health of the global economy,” it added.

Citing a report by consutancy KPMG, Kenanga Research said consumption of plastic packaging is expected to register a compound annual growth rate of 5% over the next three to five years.

“We believe local players could grow at a faster pace through gaining market share from overseas producers due to local producers having lower input, land, labour and energy costs; their better economies of scale, given that Malaysian producers of plastic packaging have significantly grown in size over the past decade; and product innovation such as the more environmentally friendly nano stretch film and mono film,” the research house explained.

Kenanga Research noted that local plastic packaging companies will also see tremendous opportunities in South-East Asia.

“The demand for plastic packaging in the region is rising amid a manufacturing renaissance as multinational companies diversify away from China for various reasons such as rising costs and supply-chain de-risking,” it said.

Kenanga Research pointed out that SLP Resources Bhd is aggressively marketing its fully recyclable mono film in Asean countries.

It added that some companies had ventured into higher-margin niche products to enhance their profitability, citing BP Plastics Holdings Bhd as an example, with the company releasing a new blown-film packaging product made with state-of-the-art printing and cutting machinery for use in the food and beverage sector.

Separately, Thong Guan Industries Bhd had tied up with ExxonMobil to produce a new thinner, lighter stretch-hood film that enhances logistics efficiency without compromising on stability, the research house said.

“We acknowledge potential downside risks to margins due to increasing operating costs, including labour and electricity; and rising freight costs on shipping diversion from the Red Sea,” Kenanga Research said.

“However, a shift towards high-margin premium products, increased automation and investment in solar energy could partially mitigate these cost pressures,” the research house added.

Kenanga Research named Thong Guan as its top sector pick for the company’s earnings growth prospects, underpinned by expansion plans for premium products, such as nano-stretch films, food wraps and some industrial bags; its aggressive push into the European and US markets with high-performing products; and its product innovation via research and development, and collaboration with the likes of ExxonMobil to produce more environmentally-friendly products.

Source: The Star

Plastic producers continue to prosper

A total of 2,585 electric vehicle (EV) charging units have been installed nationwide as of June 25, 2024, covering all states and federal territories except Labuan.

The Investment, Trade and Industry Ministry (MITI) said this was a 12.5 per cent increase from the first quarter of this year.

“Of the total, 610 units are the direct current (DC) type while the balance of 1,975 units are the alternating current (AC) type,” the ministry said in a written reply via the Parliament portal today.

This was in reply to a query from Manndzri Nasib (BN-Tenggara) who wanted to know how many EV charging stations have been installed in the country and whether the target of 10,000 public EV charging points throughout Malaysia by 2025, as outlined in the Low Carbon Mobility Blueprint 2021-2030, can be achieved.

According to MITI, Selangor recorded the highest number of EV chargers at 867, followed by Kuala Lumpur (675), Penang (277) and Johor (251).

The ministry said the number of chargers is sufficient to support the use of approximately 17,000 registered battery electric vehicles plus about 11,000 registered plug-in hybrid electric vehicles (PHEV) on the road up till now.

“Moreover, EV and PHEV users can reduce their dependence on EV chargers open for public use by installing EV charging facilities at their home,” it added.

Source: Bernama

2,585 EV charging units installed as of June 25, 2024 – MITI

The 3,000 smart factories powered by 5G which will be in operation by 2030 are expected to contribute RM36.8 billion to the national gross domestic product (GDP).

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the “tech up for a digitally vibrant nation” mission outlined in the New Industrial Master Plan 2030 (NIMP 2030) stresses the importance of adopting digital technology to create 3,000 smart factories by 2030.

“This will generate more than 150,000 high-skilled jobs in fields such as data analysis, artificial intelligence and industrial internet of things,” he said during the memorandum of understanding (MoU) exchange ceremony between the Malaysian Communications and Multimedia Commission (MCMC) and Malaysian Investment Development Authority (MIDA).

The MoU is aimed at strengthening cooperation between the agencies to promote and expedite industrial 5G adoption and usage, especially in the manufacturing and services sectors.

Tengku Zafrul said the MCMC-MIDA strategic cooperation is in line with the MADANI Economy aspirations and this marks an important step towards realising the goal of digital economy contributing 25.5 per cent to national GDP by 2025.

“For the application of the technology by the industrial and services sectors, 5G technology is a game changer to ensure a higher level of internet speed and reliability,” he added.

Tengku Zafrul said that as a critical game changer, 5G technology connectivity for industrial usage is required to have a high-speed internet network, low latency and reliability.

“We are committed to create a conducive environment for the usage of 5G technology, especially in industrial areas.

“This will not only enhance productivity and efficiency in the manufacturing and services sectors but will also attract more foreign and local high-tech companies to invest in Malaysia,” he added.

Source: Bernama

5G-driven smart factories to contribute RM36.8b to national GDP – Tengku Zafrul

The Tanjung Manis Halal Hub is expected to provide investment opportunities to investors keen to capitalise on the fast growing global demand with an estimated market potential of US$4.5 trillion by 2030, said Sarawak Deputy Premier Datuk Amar Awang Tengah Ali Hasan.

The Second Minister for Natural Resources and Urban Development, and Minister for International Trade, Industry and Investment, said the Tanjung Manis Halal Hub is integral to the Sarawak government’s goal of achieving self-sufficiency in food production and subsequently becoming a net food exporter.

He highlighted that the Sarawak government is developing designated areas for commercial agriculture, including agroparks, aquaculture parks, and agrotechnology parks, aimed at attracting private investment and promoting agriculture and food-based industries.

These parks are equipped with basic infrastructure and facilities to support agro-based industries.

“In addition, we have established the Tanjung Manis Halal Hub, spanning over 70,000 hectares and focusing on the entire food production supply chain.

“The Hub offers investment opportunities for those interested in capitalising on the rapidly expanding global demand for halal products, projected to reach USD4.5 trillion by 2030,” he said.

He was speaking during the grand opening of the Future of Food and Agriculture International Conference 2024 at the Malaysia International Trade and Exhibition Center (Mitec) in Kuala Lumpur today.

Earlier, Awang Tengah highlighted that in 2023, Malaysia’s food imports constituted 6.5 per cent of its total imports, totaling RM78.8 billion.

Similarly, Sarawak imported RM6.8 billion worth of food in 2023, accounting for 10.9 per cent of its total imports.

“Therefore, our aspiration is to achieve self-sufficiency in food production and subsequently become a net food exporter,” he said.

Awang Tengah said that Sarawak is currently undergoing an agricultural transformation as part of its Post Covid-19 Development Strategy (PCDS) 2030, with agriculture identified as a key economic sector.

The focus is on leveraging modern technologies such as mechanisation, digital applications, and advanced agricultural practices to ensure both food security and safety.

“We are advancing towards commercialising and modernising the agriculture sector, utilising smart farming and forming global partnerships to increase production and enhance higher value-added downstream food processing, especially for the export market,” he said.

In this regard, he encouraged more small and medium enterprises, as well as the younger generation, to explore opportunities in agriculture, recognising it as a profitable sector capable of generating lucrative income.

He also underscored the pivotal role of the private sector in driving the agricultural transformation agenda.

“Sarawak welcomes their active participation to enhance the ecosystem and increase food production.

“This includes investments in research and development that enhance resource efficiency and minimise environmental impact through innovative technologies such as precision agriculture tools, biodegradable packaging, and renewable energy solutions for farming operations,” he said.

He also encouraged the private sector to provide financial support and technical advisory services to farmers, promoting the adoption of sustainable agricultural practices.

“To promote and incentivise the adoption of sustainable farming practices among farmers, the Sarawak government is providing training, technical assistance, and financial support for implementing sustainable agricultural practices such as crop rotation, agroforestry, integrated pest management, and soil conservation technique,” he added.

Source: Borneo Post

Awg Tengah: Tanjung Manis Halal Hub to provide investment opportunities

The Kerian Integrated Green Industrial Park (KIGIP) will be one of the northern region hubs to nurture talent and innovation due to its location, said Prime Minister Datuk Seri Anwar Ibrahim.

The park is near Technical and Vocational Education and Training (TVET) institutions and the Giat MARA Training Centre.

“This factor will ensure a supply of graduates to fill skilled and high level positions in KIGIP while nurturing and enabling a sustainable local workforce to thrive,“ he said during the Minister’s Question Time in the Dewan Rakyat today.

According to Anwar, the planning and development of the KIGIP was implemented as a whole-of-government approach, via the cooperation and synergy between the federal government, the Perak state government, SD Guthrie Bhd and Permodalan Nasional Bhd (PNB).

“Currently, the preparation of the KIGIP master plan by SD Guthrie is being monitored by the KIGIP development special task force jointly chaired by the Ministry of Investment, Trade and Industry (MITI) and the Perak state government.

“The status of the master plan is reported regularly to the National Investment Council to ensure its planning and development align with government aspirations and will achieve its set objectives,“ he said.

The Prime Minister said KIGIP is an industrial park that will run on solar power as its primary source of green energy, with phase one to involve 404.69 hectares (999.58 acres).

With its strategic position close to Penang’s electrical and electronics (E&E) hub and Kulim Hi-Tech Park in Kedah, Anwar said KIGIP will benefit from a demand spillover. “KIGIP will contribute significantly to the country’s economy when fully operational and will attract domestic and foreign investments,“ he added.

He said multinational companies (MNCs) operating in KIGIP will also be able to build supply chains to support the development of domestic industries. “The development of KIGIP will also spawn attractive and quality career prospects for local talents in the vicinity besides generating economic activities and attracting quality investments,“ he added.

Source: Bernama

Kerian Green Industrial Park will nurture talent and innovation – Anwar

THE manufacturing sector, Malaysia’s third-largest carbon emitter, is at a pivotal point, requiring transformational changes to cut its greenhouse gas emissions.

Recognising this need, the government is promoting green manufacturing through the Investment, Trade and Industry Ministry’s National Industry Environmental, Social and Governance (i-ESG) framework.

This initiative is a cornerstone of the New Industrial Master Plan 2030, which sets a strategic roadmap towards sustainability and achieving net-zero emissions by 2030.

According to Lenovo Group Ltd director of Greater Asia Pacific region services sales Ronnie Lee, the i-ESG framework integrates environmental, social, and governance (ESG) principles to align industrial growth with global sustainability standards.

“It emphasises implementing eco-friendly practices, enhancing energy efficiency, reducing waste and improving the overall environmental footprint of manufacturing operations. Digitalisation is central to this transition,” he said.

BENEFITS OF DIGITISING MANUFACTURING

Adopting technology-enabled sustainability practices in manufacturing significantly contributes to achieving sustainability goals.

“Digitised operations allow manufacturers to monitor and optimise energy consumption, reduce waste and enhance resource efficiency.

“Meanwhile, smart sensors and IoT (Internet of Things) devices provide real-time data on equipment performance and energy use, facilitating predictive maintenance, preventing equipment failures and reducing downtime, thus contributing to energy savings and operational efficiency,” said Lee.

He said digitalisation enhances supply chain resilience by helping manufacturers anticipate disruptions, optimise inventory management and streamline logistics.

“Digital tools and advanced analytics predict demand fluctuations, enabling proactive adjustments to production schedules and inventory levels. This reduces the risk of overproduction and waste, making supply chains more responsive and resilient to changes and unexpected events.”

Additionally, smart manufacturing advances sustainable product design and resource management.

For instance, 3D printing minimises material usage through its

layered construction method, which utilises precisely the required amount of material. It supports on-demand production to reduce inventory waste and enables localised production to reduce transportation emissions.

Many 3D printers use recyclable materials to lower environmental impact and energy consumption.

CHALLENGES

Despite the evident benefits, Lee said the transition to smart manufacturing in Malaysia faces considerable resistance.

“A staggering 80 per cent of organisations are hesitant to adopt smart manufacturing technologies due to a lack of awareness about the tangible benefits and perceived financial and technical barriers,” he said.

Lee said many leaders are intimidated by the upfront costs associated with digitalisation, including investment in new technologies and workforce training. Additionally, there is a lack of understanding of how these technologies integrate into existing processes and the longterm return on investment (ROI).

“Overcoming this resistance requires a concerted effort to educate and support organisations, demonstrating the clear link between digital investments and enhanced sustainability and profitability,” he said.

DECIDING ON TECHNOLOGY INVESTMENTS

When considering technology investments, Lee said organisations

must evaluate several key factors:

1. Alignment with strategic goals: Technology investments should align with the organisation’s long-term strategic goals, particularly those regarding sustainability and efficiency.

2. Scalability and flexibility:

Any chosen solution should be scalable to accommodate future growth and adaptable to evolving business needs. Flexibility is crucial to ensure seamless integration with existing systems, allowing organisations to expand their capabilities without significant disruptions.

3. Cost-benefit analysis:

A thorough cost-benefit analysis should be conducted to evaluate the potential return on investment (ROI), considering both financial returns and sustainability

gains. This comprehensive view helps manufacturers make informed decisions that balance economic and environmental benefits.

4. Vendor support and expertise: Partnering with technology providers who offer comprehensive support and possess a proven track record of successful implementations is crucial. Such vendors can provide the expertise and resources necessary to navigate the complexities of new technology adoption, ensuring smooth deployment and ongoing operational success.

By embracing digitalisation and aligning with the i-ESG framework, the manufacturing sector can make significant strides towards reducing its carbon footprint and achieving its long-term sustainability goals.

Source: NST

How digitalisation drives green manufacturing

Premier says move will draw investments, see GDP growth

Sarawak has set its sights on establishing itself as a semiconductor highvalue-added hub in Southeast Asia by 2030, Datuk Patinggi Tan Sri Abang Johari Tun Openg said.

The Premier said collaborations with United Kingdom companies strategically align with this aspiration which would lead to an increase in investments and the state’s gross domestic product.

Towards realising this, he said Sarawak will unveil its Holistic Sustainability and Circular Economy Strategy by the end of this year to solidify state-owned SMD Semiconductor Sdn Bhd’s position globally and establish new industry standards in sustainable business practices.

“I recently witnessed the exchange of a Memorandum of Understanding (MoU) between SMD Semiconductor and Compound Semiconductor Application Catapult at the House of Commons in the UK to promote collaboration in the development of advanced semiconductor chips.

“SMD Semiconductor will be setting up a research and development office in the United Kingdom to facilitate its research and commercialisation activities.

“The areas of cooperation and collaboration include the development of new compound semiconductor chips tailored for automotive and space applications,” he said when launching SMD Semiconductor’s chip design centre and academy at La Promenade Mall here yesterday.

He said the MoU also entails talent development initiatives encompassing academic, industry and governmental partnerships spanning the UK, Malaysia and Sarawak in particular, to nurture skilled professionals in the semiconductor sector.

He added that SMD Semiconductor has been granted a 10-acre plot in Samajaya Free Industrial Zone to expand its semiconductor operations, addressing the increasing importance of advanced chip packaging technologies for highperformance semiconductor chips.

“For Sarawak to participate and capture the attention of global industry leaders, SMD Semiconductor must position itself in a region with abundant expertise, vibrant innovation and a substantial market presence.

“It is crucial for the company to assemble a team of extraordinary individuals and top-tier engineers for the development of advanced semiconductor technologies,” he said.

He added that he was supportive of SMD Semiconductor working with i-CATS University College in introducing aerospace modules into the curriculum to pave the way for students to advance their career in the high-tech aerospace industry.

“I hope SMD Semiconductor can collaborate with private partners and collaborate on the research and the development of a Sarawakowned chip to be incorporated into satellites.

“The collaboration will advance our semiconductor technology and significantly elevate Sarawak’s capabilities,” he said.

Meanwhile, Education, Innovation and Talent Development Minister Dato Sri Roland Sagah Wee Inn said a batch of 15 trainees will conclude their six-month training programme next month as part of a collaboration between SMD Semiconductor and the Centre for Technology Excellence Sarawak (Centexs).

The trainees would then be employed by SMD Semiconductor and its partners with a starting salary of RM4,000 per month, he said.

Sagah highlighted that SMD Semiconductor has grown from just three engineers to its current workforce of 30 engineers, and it is projected to reach 50 engineers by this year-end.

Following the launch of the chip design centre, SMD Semiconductor and the Land and Survey Department inked an MoU for the development of an electronic tracking embedded system.

According to Abang Johari, this collaboration has the potential to drive innovative solutions in various applications, including land marking, land area calculation, slope detection and geo-positioning.

Among those present yesterday were Deputy Premier Datuk Amar Awang Tengah Ali Hasan, SMD Semiconductor chief executive officer Shariman Jamil, and Land and Survey Department director Awang Zamhari Awang Mahmood.

It is crucial… to assemble a team of extraordinary individuals and top-tier engineers for the development of advanced semiconductor technologies.

Source: Borneo Post

Positioning Sarawak as semiconductor hub

The initiative to elevate production up the value chain will position Malaysia at the forefront of the semiconductor industry, said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz.

He said this move presents an opportunity for Malaysia to play a pivotal role in the global supply chain, especially amid the trade tensions between the US and China as companies are reconfiguring their supply chains.

“The semiconductor industry significantly influences the global supply chain. We have observed the realignment and redefinition of supply chains.

“As companies strive to become more competitive and secure their supply lines, the semiconductor industry is poised for continued growth,“ he said at the Bursa Malaysia-Hong Leong Investment Bank Stratum Focus Series XVII on “Semicon: Light at the End of the Tunnel?” today.

Tengku Zafrul said Malaysia can and will leverage its mature industrial infrastructure with good connectivity, rule of law, strategic location and ease of doing business to further integrate ourselves into the global semiconductor value chain.

”This is a crucial moment for Malaysia, and we must seize this moment to ensure resilience and growth in our electrical and electronics sector,” he said.

Furthermore, he said, transitioning to advanced packaging in the semiconductor industry demands substantial capital expenditure, which poses a challenge given the current fiscal constraints.

The move, while promising for technological advancement, would necessitate significant government support and fiscal backing.

“Advanced packaging requires very high capex, so this will also likely require a lot of support, which we may not have the fiscal space at this point in time. Hence, we need to be aggressive, but we need to be at the same time using our competitive advantage,” he said.

The Asia-Pacific semiconductor market size was estimated at almost US$288 billion in 2023 and is forecast to reach US$612 billion by 2033, growing at a compound annual growth rate of 7.83% from 2024 to 2033.

The global semiconductor industry is expected to reach US$1 trillion by 2030.

Tengku Zafrul said the government is confident with the strong foundation in the semiconductor industry, Malaysia can be a true semiconductor powerhouse not just in assembly, but also in innovation and design.

At a separate function today, Tengku Zafrul commented that Google’s latest investment highlights Malaysia’s competitiveness, ease of doing business and growing importance as a regional hub for digital innovation.

He said the investment recognises the nation’s potential to lead the region’s digital economy.

“This is particularly pertinent as Malaysia intends to strongly promote the digital economy regionally when we take up the Asean chairmanship next year.

“Google’s presence will not only create thousands of high-skilled jobs but also accelerate the digital transformation of our businesses and public sector, strengthening our tech leadership and supporting Malaysia’s positioning as a tech hub in Southeast Asia,” he said at Google Cloud Malaysia Day.

Tengku Zafrul said this investment serves as a strong foundation for Malaysia to embrace the cloud as a springboard for its operations and business innovation, unlocking opportunities and contributing to the growth and prosperity of the Malaysian economy.

He said digitalisation and artificial intelligence (AI), among others, are key to shaping a sustainable and inclusive socio-economic future, and the cloud is our gateway to that promising horizon.

He added that the Madani government recognises the transformative power of digitalisation, cloud computing and AI, making them key drivers in our economic roadmaps, such as the New Industrial Master Plan 2030 (NIMP 2030).

“We understand that investing in cloud infrastructure and fostering a digital-first mindset is essential for creating a sustainable and prosperous future for our nation,” he said.

Tengku Zafrul said the positive and deep impact of cloud technologies on the Malaysian economy is clear.

It boosts productivity and creates high-skilled jobs, he added.

Malaysia has seen a surge in efficiency and innovation as industries leverage cloud-based solutions to streamline operations, automate tasks and gain valuable insights from data.

The manufacturing sector, in particular, has embraced cloud-enabled technologies to optimise supply chains, monitor equipment performance and improve production efficiency.

“The healthcare industry has also seen significant benefits, with hospitals leveraging cloud technology to improve patient care, manage electronic medical records and facilitate telemedicine services.

“These advancements not only drive productivity by leveraging data-driven insights but also create demand for high-skilled professionals in areas like data analytics, software development and cloud architecture,” said Tengku Zafrul. 

Source: Bernama

Initiative to move up value chain will put Malaysia at forefront of semicon industry: Tengku Zafrul

TWO ministries are set to hold discussions to enhance the logistics infrastructure, particularly at airports, to support the export movements of the semiconductor industry.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said his ministry and the Transport Ministry will explore ways to do so, with air transport being key to the industry.

“About 90% of semiconductor exports are transported via air, but land transport is still necessary to reach the airports,” he said.

Citing Penang’s airport for the challenges it faces in this sector, he said: “Some airlines have indicated their willingness to send Boeing 777 aircraft. Unfortunately, at the moment, the 777 cannot land in Penang in terms of cargo capacity.”

Tengku Zafrul also said there are plans for other airports, including Kuala Lumpur International Airport and Johor’s Senai Airport.

“There are proposals to expand our airports such as in Senai. We will also discuss this with the Transport Minister because, under the National Semiconductor Strategy (NSS), logistics is a crucial issue that we need to address,” he told the Dewan Rakyat yesterday.

He was responding to a question from Paya Besar MP Datuk Mohd Shahar Abdullah of Barisan Nasional, about Malaysia’s reliance on air cargo for semiconductor exports compared with railway logistics, given that 95% of semiconductor exports in Malaysia rely on air cargo.

Tengku Zafrul said Singapore has a significant advantage due to its more efficient infrastructure, especially in high-tech sectors.

He said global political tensions, such as the United States-china trade war and the Russia-ukraine crisis, have had an impact on Malaysia’s semiconductor industry.

“These conflicts indirectly affect our semiconductor industry. However, they also present opportunities for Asean and Malaysia as multinational companies diversify their locations,” he added.

Tengku Zafrul noted that companies like Intel and Globalfoundries have invested in Malaysia to diversify their supply chains.

“Other companies in the E&E (electrical and electronics) sector like Texas Instruments, Ericsson and Bosch are also diversifying their supply chains here,” he added.

He said the government is committed to ensuring continued investments in the E&E industry and to introducing the NSS, which outlines Malaysia’s plans to become a major semiconductor hub over the next 10 years.

Prime Minister Datuk Seri Anwar Ibrahim has said that under the NSS launched in April, Putrajaya aims to establish at least 10 Malaysian companies in design and advanced packaging, each generating revenue of between Rm1bil and Rm4.7bil.

He also said Malaysia intends to attract Rm500bil in investments for integrated circuit design, advanced packaging and manufacturing equipment for semiconductor chips.

Source: The Star

Govt to boost chips export logistics

Ann Joo Resources Bhd’s recent contract win for the design and construction of electrification works for the East Coast Rail Link (ECRL) feeder stations is seen as a positive step, as it marks Ann Joo’s entry into the utility-infrastructure sector.

TA Research, which views the job win positively, said this move marks Ann Joo’s first step into vertical expansion, which would complement its existing core operations.

“Ann Joo is on the verge of entering the utility-infrastructure sector to capitalise on the increasing demand for electricity, driven by robust population growth and rising foreign direct investment in the data centre industry,” the research house noted.

Last week, Ann Joo, together with its partner PT Lumintu Insan Mandiri, secured a contract valued at Rm297.9mil from Tenaga Switchgear Sdn Bhd, a subsidiary of Tenaga Nasional Bhd (TNB).

Key components of the project include a 132 kilovolt switching station, overhead transmission lines, underground cable installation and associated work for the ECRL feeder stations.

The project is expected to be completed by May 31, 2026.

TA Research highlighted that partnering with PT Lumintu, an Indonesiabased company specialising in engineering, procurement and project management services, will enable Ann Joo to expedite its diversification process and better position itself for domestic utility-infrastructure projects.

The research firm believes Ann Joo’s venture into the sector aligns well with TNB’S indicative capital expenditure of about Rm15bil annually for upgrading the country’s power grid, as outlined in the New Energy Transition Roadmap (NETR).

“This development will stimulate demand for steel products, as more steel-based wiring and cabling will be required to support the grid upgrades,” it added.

Last month, Ann Joo Steel Bhd, a subsidiary of Ann Joo Resources, and Solarvest Holdings Bhd, a leading clean-energy expert, successfully completed the installation of a 3.3 megawatt-peak rooftop solar photovoltaic system at AJS’ manufacturing plant in Seberang Perai, Penang.

TA Research said the partnership leverages PT Lumintu’s construction expertise and allows Ann Joo to internalise its steel supply chain, thereby strengthening its market position.

Despite the positive outlook, TA Research has maintained their earnings forecasts, pending further details on the consortium’s shareholding structure.

Following the recent contract win, TA Research revised its target price-to-earnings ratio from 11 times to 12 times, resulting in a new target price of RM1.64 a share.

The research house said it believes the valuation is fair, considering Ann Joo’s potential as a key supplier of steel materials for the Penang light rail transport project, supported by its cost competitiveness from its steel-making plant in Prai, Penang.

Moreover, it said the increasing construction activity, due to the revitalisation of the property sector, is driving higher demand for steel products.

Additionally, the upgrading of the power grid, in line with the government’s energy goals, further boosts demand for steel.

Source: The Star

Positive views on Ann Joo’s expansion into infrastructure

The government will implement measures to bolster airport infrastructure supporting the country’s semiconductor exports in order to achieve the aspirations of the National Semiconductor Strategy.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said his ministry (MITI) will discuss the issue with the Ministry of Transport (MOT) soon.

He said that 90 per cent of the country’s exports are supported by air transportation.

“Exports to foreign countries via Singapore are quite large as they have an efficient infrastructure, especially for this high-tech sector.

“In Penang, there was an airline willing to use a 777 cargo plane, but unfortunately, the plane could not land there. There are also suggestions for us to expand our airport in Senai, Johor,” he said during the question and answer session at the Dewan Rakyat today.

Similarly, he said the government would also harness land transportation, especially the East Coast Rail Link project, which will be a catalyst for economic and industrial development in the states of the East Coast region.

“The government, via the Malaysian Investment Development Authority, always takes proactive measures in an effort to attract foreign and local investments in various sectors into any state in Malaysia,” he explained.

Tengku Zafrul said that the Kelantan state government has given excellent support in ensuring that the electrical and electronic industry grows in the state, for example, through the presence of Rohm Wako Electronics (Malaysia) Sdn Bhd with an investment value of over RM1.7 billion.

The investment has created 2,000 job opportunities for the people, especially in the engineering, science and technical fields, he said.

He added that the government will always support and be open to working with the state governments in their respective development plans to grab the opportunities to attract quality investments, such as in the field of integrated circuit design.

Source: Bernama

MITI, MOT to mull bolstering airport infrastructure for semiconductor exports – Tengku Zafrul