Penang remains committed to the development of Silicon Island to address the state’s pressing need for land, particularly for industrial purposes, with a strategic connection to the existing ecosystem in Bayan Lepas, including the Penang International Airport and the North-South Expressway.

State Infrastructure, Transport and Digital Committee chairman Zairil Khir Johari said the island, part of the Southern Penang Island (PSI) reclamation project, is slated for industrial, commercial, residential and tourism development to meet the state’s needs over the next 40 years.

“The Bayan Lepas Free Industrial Zone (FIZ) is widely recognised as a prime destination for international investments, notably in the electrical and electronics (E&E) sector. Expanding the FIZ through the establishment of the high-tech Green Tech Park on Silicon Island caters to existing investors seeking expansion opportunities and attracts new investments.

“Through Silicon Island, Penang anticipates a significant economic impact, with a projected gross domestic product (GDP) contribution of RM1.1 trillion, attracting investments totaling RM74.7 billion and creating 220,000 job opportunities,” he said at the state assembly sitting here today.

He was replying to a question from A. Kumaresan (PH-Batu Uban), who asked about the rationale behind the continued reclamation of Islands A, B, and C, projected profits and the state government’s plans for the reclaimed land.

Zairil (PH-Tanjong Bungah) said Penang plans to utilise Silicon Island for infrastructure development, green-blue networks, public amenities and other use (888 acres), industrial zones (720 acres), housing, including affordable types (388.1 acres), mixed development (164.3 acres) and commercial purposes (139.6 acres).

Silicon Island, spanning 2,300 acres (930.78 hectares), represents Penang’s maiden venture into direct reclamation-driven development, signaling a strategic move to ensure sustained economic growth.

Following the Federal Government’s commitment to finance the implementation of the Light Rail Transit (LRT) system in Penang, the state government has agreed to scale down the PSI project, suspending the reclamation of Islands B and C for the time being.

Zairil also explained that although the state government has applied for Environmental Impact Assessment (EIA) approvals concurrently for all three islands, each island has separate approvals.

“If we implement only Island A, it has its own approval, so it’s not a problem. It doesn’t affect the EIA application because we have separated it. For Islands B and C, the approvals are still valid, but the state government has decided not to proceed upon the advice of the Federal Government,” he said.

Source: Bernama

Penang Assembly: Silicon Island development to address industrial land shortage

Malaysia’s semiconductor industry is set to experience a further boom under the National Semiconductor Strategy (NSS), with the nation set to woo at least RM500 billion of investments in the first phase of the plan, announced Prime Minister Datuk Seri Anwar Ibrahim today.

While describing the NSS as a living document, evolving as needed, he highlighted that Malaysia remains steadfast in its aspiration to become a major global player in technology, powered by the semiconductor industry.

“Against this backdrop, during our National Investment Committee meeting on April 16, I requested a strategic plan for Malaysia’s semiconductor industry.

“Today, six weeks later, I am pleased to share with you the salient features of Malaysia’s NSS,” he said in his speech at SEMICON Southeast Asia 2024 today.

He said NSS is structured in three phases to foster collaboration with companies across ASEAN, Asia, and the global stage.

In the first phase, domestic direct investment (DDI) will focus on integrated circuit (IC) design, advanced packaging and manufacturing equipment, while foreign direct investment (FDI) will be focused on wafer fabs and manufacturing equipment.

“In this phase, we will leverage our industry’s existing capacity and capabilities to support the modernisation of outsourced semiconductor assembly and test (OSAT) with moves towards advanced packaging; grow existing fabs in Malaysia and pursue FDI on expanding capacity in trailing edge chips, particularly power chips; as well as develop local chip design champions,” he said.

Under NSS’ second phase, the nation is keen to establish at least 10 Malaysian companies in design and advanced packaging with revenues of between RM1 billion and RM 4.7 billion (US$210 million and US$1 billion).

It also hoped to nurture at least 100 semiconductor-related companies with revenues close to RM1 billion (US$210 million), creating higher wages for Malaysian workers.

“Phase two is all about moving to the frontier. We will pursue cutting-edge logic and memory chip design, fabrication and testing, and look to integrate the purchasers of these chips.

“Once phase one is implemented, more leading advanced chip manufacturers will be attracted to our shores. This is where our local design champions can be easily integrated into the ecosystem of these advanced fab companies,” he said.

For the last phase, Malaysia aims to double down by supporting the development of world-class Malaysian semiconductor design, advanced packaging and manufacturing equipment firms, while attracting buyers of advanced chips such as Apple, Huawei, Lenovo and other such cutting-edge companies to pursue advanced manufacturing in Malaysia.

To achieve the goals, Anwar said the nation will develop a global research and development hub for semiconductors, featuring world-class universities, corporates and centres of excellence.

On top of that, 60,000 high-skilled Malaysian engineers will be trained and upskilled to support the growing demand from the sector.

The government will also allocate at least RM25 billion in fiscal support to operationalise the NSS with targeted incentives, details of which will be announced by the Investment, Trade and Industry Ministry soon.

“Today, I offer our nation as the most neutral and non-aligned location for semiconductor production, to help build a more secure and resilient global semiconductor supply chain.

“On that note, our key proposition of ‘Malaysia: Bridging Technology for Our Shared Tomorrow’ reflects our sincere aspiration to promote technology for humanity’s greater good, by being your leading partner and collaborator in the global semiconductor industry and beyond,” he said.

In reaffirming Malaysia’s commitment to becoming a global leader in the semiconductor industry, the National Semiconductor Strategic Task Force (NSSTF), with CREST serving as the secretariat, will focus on fostering innovation, enhancing research and development capabilities, and driving the commercialisation of semiconductor technologies.

Source: Bernama

Malaysia aims to woo RM500 bln investments in phase 1 of NSS – PM Anwar

The government will allocate at least RM25 billion (USD 5.3 billion) in fiscal support to operationalise the National Semiconductor Strategy (NSS).

In his keynote address at the launch of SEMICON Southeast Asia 2024, Prime Minister Datuk Seri Anwar Ibrahim said the allocation was among the five targets from NSS that was launched in April, this year.

“The government will train and upskill 60,000 high-skilled Malaysian engineers and allocate at least RM25 billion (USD5.3 billion) in fiscal support to operationalise the NSS with targeted incentives.

“The details (of the incentives) will be announced by the ministry soon,” he said at the launching of SEMICON Southeast Asia 2024 at Malaysia International Trade and Exhibition Centre (Mitec) here, today

Present was International, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

Meanwhile, other targets include the attraction of at least RM500 billion in investments for Phase 1 of the National Semiconductor Strategy (NSS) which is spearheaded by the Ministry of International, Trade and Industry (MITI).

“Other targets include the establishment of at least 10 local companies in design and advanced packaging with revenues between RM1 billion to RM4.7 billion, and at least 100 semiconductor-related companies with revenues close to RM1 billion, creating higher wages for Malaysian workers by Phase 2.”

Other targets will also see Malaysia being developed as a global research and development (R&D) hub for semiconductors that feature world-class universities, corporate R&D and centres of excellence.

Source: NST

Govt allocates RM25bil to operationalise National Semiconductor Strategy

Malaysia is aspiring to train and upskill 60,000 high-skilled local engineers, in a bid to boost the local semiconductor sector, Prime Minister Datuk Seri Anwar Ibrahim said.

In his speech at Semicon South-east Asia here, Anwar said that this is one of the five salient features of Malaysia’s National Semiconductor Strategy (NSS).

He also said that the Malaysian government will allocate at least RM25 billion in fiscal support to operationalise the NSS with targeted incentives, details of which will be announced by the Ministry of Investment, Trade and Industry (Miti).

“Technology is evolving rapidly, with adoption rates speeding up exponentially. For example, Netflix took three and a half years to reach a million users, Facebook took 10 months, Instagram took two and a half months, and ChatGPT took just five days. Hence, we need to be agile and adaptable by strengthening our foundations to different contexts and circumstances.

“We also recognise that reaching the frontier of chip technology is neither easy, nor cheap. The world’s leading chip manufacturer, TSMC in Taiwan, has a capital expenditure budget of US$28 billion (RM131.4 billion) to US$32 billion for 2024. While it will take us time to reach there, we are currently focusing on other parts of the value chain. For instance, electric vehicles (EVs) contain over 3,000 chips, two to five times that of ICE (Internal Combustion Engine) vehicles.

“With the growth of the global EV market, Malaysia could become the key hub to supply power chips to EV cars,” Anwar said.

He added that power chips are key in energy transition and decarbonisation technologies and — through Malaysia’s New Industrial Master Plan 2030 (NIMP 2030) and the National Energy Transition Roadmap (NETR) — Malaysia already has the right policy enablers and incentives for companies wishing to manufacture them here.

“Ultimately, the NSS is a means for Malaysia to advance and democratise technology for the good of all humanity. To achieve this, we need your support, both from those here today and others beyond this room,” he added.

Source: Malay Mail

PM Anwar: Malaysia to train, upskill 60,000 engineers, allocate RM25b in fiscal support for National Semiconductor Strategy

Selangor’s venture into integrated circuit (IC) designing, including the development of Southeast Asia’s biggest IC Design Park in Puchong, aims to elevate Malaysia up the semiconductor industry’s value chain.

Menteri Besar Dato’ Seri Amirudin Shari said now is the best time to push Selangor from just an area of wafer assembly to a hub for designing and intellectual property processes.

He believes the state is well-positioned to achieve this, considering its decades of experience in the electronics and electrical (E&E) industry.

“Selangor’s foray into IC design aims to move Malaysia up the value chain from being just a bit-part player to a strategic player in a large ecosystem.

“This initiative aims to train more than 300 engineers, and we have already secured the interests of key operators.

“However, there are still golden opportunities for us to collaborate,” he said during a Semicon Southeast Asia (SEA) 2024 luncheon session at the Malaysia International Trade and Exhibition Centre today.

Amirudin said Selangor’s strategic vision goes beyond nurturing talent, and it is committed to continuously evolving by understanding the industrial community’s needs.

Later, when speaking to the press, the Menteri Besar said the semiconductor industry holds immense market potential for the nation, extending to regions like Kedah, Penang, and Sarawak.

He said the trade tensions between the United States and China will drive companies globally to seek opportunities in the Southeast Asian region, including Malaysia.

“Thus, I believe that it will create job opportunities in terms of employment and technology transition.

“We are not only seeking investments but also preparing the ecosystem that will foster a skilled workforce in line with current demands,” Amirudin said.

Previously, on April 22, Prime Minister Datuk Seri Anwar Ibrahim announced the development of the region’s largest chip design park in Puchong with the support of the Selangor state government.

He said the park would be a hub for many semiconductor industry players to set up their regional bases, providing a positive spillover effect for the country.

The park, which begins operating by July this year, has already garnered tremendous interest from industry players, prompting its expansion from the initially-proposed three-storey and 45,000-square-foot facility to a five-storey and 70,044-square-foot building.

Enhancing upstream process

Meanwhile, state executive councillor for investment, trade, and mobility Ng Sze Han said IC Design Park’s development is set to enhance the upstream process of Malaysia’s semiconductor industry, aligning with the country’s goal of becoming a semiconductor hub in Asia.

“The semiconductor industry is anticipated to be a significant contributor (to the economy), and Selangor is positioned to assist Malaysia in establishing a comprehensive ecosystem.

“At present, Malaysia’s semiconductor industry is robust, particularly in the downstream process,” he told Selangor Journal after Semicon SEA 2024’s opening ceremony this morning.

Citing Semicon SEA president and chief executive officer Ajit Manocha, Ng said the industry will continue to grow significantly in the future, with a global value of US$1 trillion (approximately RM4.5 trillion) by 2030.

He hopes Selangor will play a key role in contributing to the national semiconductor supply chain. If this objective materialises, it will enable the state to make significant economic contributions to Malaysia.

Previously, economist Prof Barjoyai Bardai had suggested that Malaysia focus on moving up the semiconductor value chain by prioritising sectors like IC design rather than just manufacturing, as current investments towards the industry are still primarily at the lower end of the chain.

Earlier today, Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said Malaysia is looking to capitalise on the opportunity to expand its semiconductor industry, leveraging its five decades of experience in the field.

“Our expectation is to make Malaysia a hub for semiconductors in Asia,” he told the press after delivering his speech at the Semicon SEA 2024 opening ceremony.

“There’s a global demand for semiconductors, given the advancement of technology, especially in artificial intelligence. We, Malaysia, have developed and been part of this industry for the past 50 years.

“This is our opportunity to capitalise on what we have been investing for five decades and move up to the next level,” he said.

Source: Selangor Journal

Through chip designing, Selangor aims to push Malaysia up semiconductor value chain

Malaysia aims to court at least RM500bil of investment in sector, says PM

Malaysia aims to be a global R&D hub for semiconductors, featuring world-class universities, corporate R&D, and centres of excellence, blending the very best of Malaysian and international talent, says Datuk Seri Anwar Ibrahim.

The Prime Minister said through the National Semiconductor Strategy (NSS), Malaysia aims to court at least RM500bil of investment in integrated circuit (IC) design, advanced packaging and manufacturing equipment for semiconductor chips.

“The government will allocate at least RM25bil in fiscal support to operationalise the NSS with targeted incentives, details of which will be announced by Miti (Investment, Trade and Industry Ministry) soon,” said Anwar during his keynote address when launching the SEMICON South-East Asia 2024 yesterday.

The Prime Minister said that the NSS would also train and up-skill 60,000 highly skilled Malaysian engineers, adding that Putrajaya also aims to establish at least 10 Malaysian companies in design and advanced packaging with revenues between RM1bil and RM4.7bil.

In the effort to create higher wages for Malaysian workers, Anwar said the federal administration has set a target of establishing 100 semiconductor-related companies with revenues close to RM1bil.

The Prime Minister said Malaysia is steadfast in promoting technology for humanity’s greater good.

“Geopolitical dynamics aside, a robust multinational semiconductor production remains vital for humankind’s survival, particularly as we are running out of time in our climate action and risk mitigation.

“Today, I offer our nation as the most neutral and non-aligned location for semiconductor production, to help build a more secure and resilient global semiconductor supply chain.

“Our key proposition, ‘Malaysia: Bridging Technology for Our Shared Tomorrow’, reflects our sincere aspiration to promote technology for humanity’s greater good by being your leading partner and collaborator in the global semiconductor industry and beyond,” he added.

Anwar said the salient features of the NSS are the crucial elements in ensuring that the country achieves its ambition of becoming a global chip hub.

Under the NSS, which is led by Miti, Anwar said the strategy is structured in three phases, which are designed to foster collaboration with companies across Asean, Asia, and the global stage.

“Phase one involves building on our foundations; phase two is all about moving to the frontier; and phase three is about innovating at the frontier.

“To stay flexible and agile, the NSS will be a living document, evolving as needed, but we remain steadfast in our aspiration to make Malaysia a major global player in accessible technology for all, powered by our semiconductor industry,” he added.

The Prime Minister also touched on Malaysia’s energy transition plan, saying that the government aims to have 40% of the country’s primary energy mix from renewable energy sources by 2035.

This initiative, he said, aims to reduce carbon dioxide emissions by 10 million tonnes annually and achieve 100% renewable energy by 2050.

“The government supports exploring new technologies like green hydrogen, nuclear technology, and large-scale energy storage to reduce dependence on fossil fuels and meet the 2015 Paris Accords’ targets,” he said.

Source: The Star

Bid to be global semiconductor hub

Aurelius Technologies Bhd (KL:ATECH) has proposed to undertake a private placement of up to 39.41 million shares, or 10% of its issued share capital, mainly to build a new manufacturing plant in Kulim Hi-Tech Park in Kedah.

The placement is expected to raise RM123.34 million based on an illustrative issue price of RM3.13 per share, according to the electronics manufacturing service provider’s filing with Bursa Malaysia on Tuesday.

A total of RM55 million of the gross proceeds will be used for the construction of the new integrated manufacturing plant spanning 243,977 sq ft, followed by RM20.18 million for working capital and RM20 million for new machinery and equipment, the group said.

Another RM15.40 million will go towards the repayment of bank facilities, RM11.5 million for investment in strategic new vacant land and the remaining RM1.27 million for defraying the placement’s expenses.

Maybank Investment Bank has been appointed as the principal adviser and placement agent for the private placement, which is expected to be completed in the second quarter of 2024.

In a separate filing, Aurelius posted a quarterly net profit of RM15.73 million — its highest since being listed in the Main Market of Bursa Malaysia in December 2021 — for the first quarter ended March 31, 2024 (1QFY2024), on revenue of RM125.70 million.

The earnings were driven by an improved order book across all customers, resource optimisation and improved production capacity utilisation from the previous year, the group said.

There are no comparative figures as the group has changed its financial year end to Dec 31, from Jan 31.

Aurelius declared a first interim dividend of 2.7 sen per share, with an ex-date of June 12 and a payment date of July 12.

Aurelius shares closed six sen, or 1.78%, lower at RM3.31 on Tuesday, valuing the group at RM1.30 billion. Year to date, the counter has climbed 73 sen, or 28.29%.

Source: The Edge Malaysia

Aurelius plans to raise RM123 mil via private placement for manufacturing plant, posts record-high quarterly net profit

The Penang government aims to make the state a global high-tech hub to ensure it remains competitive internationally in the semiconductor sector.

Chief Minister Chow Kon Yeow said in addition to continuing to develop the electric and electronic (E&E) sector, especially the semiconductor industry, the state government is also focusing on developing the supply chain for front-end manufacturing equipment and encouraging research and development activities (R&D) and Design & Development (D&D.

“Penang is also committed to encouraging and helping more local companies get involved in the global value chain to move the value chain and strengthen the existing ecosystem.

“In addition, the government also encourages research and development, the use of technology and innovation, especially related to the digitalisation aspect because this is capable of changing the high value and sustainable industrial to generate jobs and income,“ he told the State Assembly today.

He was responding to an oral question from Lee Khai Loon (PH-Machang Bubuk) about the state government’s plan to ensure Penang remains competitive in semiconductor development at the international level.

Chow (PH-Padang Kota) also said that the Semiconductor Strategic Master Plan, pioneered by the Ministry of Investment, Trade and Industry (MITI), is being developed to provide a direction to the semiconductor industry.

This is to ensure the industry continues to develop into more value-added activities and the country remains a quality investment destination, he added.

To achieve this, he said, the state government has to play an important role, especially in facilitating the setting up of factories.

Source: Bernama

Penang aims to become global high-tech hub – Chow

Deputy Premier Datuk Amar Awang Tengah Ali Hasan has invited G-COVE Technologies Co Ltd, a producer of moulded bamboo fibre eco-friendly packaging products based in China, to expand its business and investment activities in Sarawak.

According to a press release from the International Trade, Industry and Investment Ministry’s office, Awang Tengah relayed this to G-COVE president, Eugene Chua, during a working visit to the factory in Chengdu, China yesterday.

This invitation, said the minister, was in line with Sarawak’s aspiration to promote the development of bamboo-based industry as new growth initiatives under the green economy policy.

“We have land, good infrastructure and competitive green electricity tariff in Sarawak and I’d like to invite G-COVE to consider Sarawak as their based for expansion to cater for the growing halal and biodegradable packaging products particularly in Southeast Asia region,” he said in the press release.

During the visit, Chua gave the Sarawak delegates some insights on the company’s mission and operation.

According to Chua, G-COVE’s bamboo-based fibre packaging products are biodegradable and eco-friendly, and are halal-certified, thus are in high demand by the Muslim consumers in China, Middle East countries and Malaysia.

The delegation was also briefed on the company’s investment on latest state-of-the-art technology to ensure that their products are of high quality.

Joining Awang Tengah during the visit were the ministry’s advisor Datuk Seri Naroden Majais, Deputy Minister of Urban Planning, Land Administration and Environment Datuk Len Talif Salleh, and other senior officers from various government agencies. 

Source: Borneo Post

Deputy premier: Sarawak ministry visits China to evaluate technology, products for bamboo processing industry in state

EcoNiLi Battery New Energy Sdn Bhd has launched a battery recycling plant in Perak with an RM50 million investment for its first phase.

Chief executive officer Datuk Jayden Goh said the plant, located in the Tasek Industrial Estate, Ipoh, can process 24,000 metric tons of used batteries annually.

He said the company aims to spearhead Malaysia’s battery recycling industry, with a second phase investment of RM100 million planned for next year.

“Our factory features Malaysia’s first hydrometallurgical plant for integrated critical metal recovery, aligning with the state’s renewable energy policies.

“We expect to produce 12,000 metric tons of black mass containing lithium, cobalt, and nickel, essential for new battery production,” Goh told a media conference.

The facility’s opening, officiated by the Raja Muda of Perak, Raja Jaafar Raja Muda Musa, is set to create 300 jobs, boosting the local economy.

Goh said since 2018 EcoNiLi has established a strong presence in the battery recycling sector in Asia and Europe, with Perak chosen for its strategic location between key northern and central markets in Peninsular Malaysia.

“The state also hosts the Automotive High Tech Valley (AHTV) Project in Tanjung Malim, potentially providing new customers,” he said.

He said plans are underway to develop a second plant in Gopeng, Perak, once the Ipoh facility reaches full capacity.

Initially focusing on domestic demand, he said EcoNiLi aims to position Perak as a hub for lithium-ion battery recycling in Asia while promoting environmental sustainability.

He noted that advancing battery recycling in Malaysia requires collaboration between the government, companies and the community.

“We manage lithium-ion batteries to prevent improper disposal. Many companies collect these batteries but lack the expertise or licences to process them, so we handle it,” Goh added, noting that sources include companies using lithium-ion batteries in equipment, including new energy vehicle firms importing batteries from abroad, primarily China. 

Source: Bernama

EcoNiLi launches RM50m battery recycling plant in Perak

The glove sector has rebounded from its downturn a year ago, according to Malacca Securities’ research head, Loui Low.

Low said that industry players are witnessing a resurgence in profitability, and he anticipates that the heightened import tariffs levied by the United States on China will eventually benefit the industry overall.

“With these factors, volume will be coming back and average selling prices (ASPs) will be maintained. That should provide upside to the glove sectors,” he told Business Times.

According to several analysts reports, the glove industry appears poised for further recovery with the latest financial results of two of the four largest companies in the nation, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd, showing a return to profitability.

For the first quarter ended Mar 31, 2024 (Q1 2024), Kossan posted a net profit of RM31.45 million compared to a deficit of RM24.25 million a year ago, driven by contributions from its glove division. 

Meanwhile, Hartalega posted a net profit of RM12.7 million for the financial year ended Mar 31, 2024, versus a loss of RM235.14 million the previous year. It also logged a net profit of RM15.12 million in the fourth quarter ended Mar 31, 2024, versus a loss of RM319.85 million in the same period last year. 

In a research note, Maybank Investment Bank Bhd (Maybank IB) said Kosan’s results came within its expectations, albeit being below consensus’. 

Given the improving demand for gloves and better pricing power , the firm raised its earnings forecast for the company for financial year 2024 (FY24) until FY26 by nine per cent to 34 per cent. 

“As the margin outlook is improving due to stronger glove demand and higher average selling prices, by its Chinese counterparts, we expect Kossan to report better earnings in the coming quarters as it passes on the higher raw material costs,” it said in a note. 

The firm maintained “buy” on the stock with a higher target price (TP) of RM2.72 versus RM2.70 previously. 

Maybank IB also raised its earnings forecasts for Hartalega by 35 per cent and 19 per cent for FY25 and FY26, respectively, after factoring in the company’s FY24 results, a better utilisation rate, and a higher production capacity of 36 billion and 37.5 billion pieces per annum for FY25 and FY26, respectively. 

It noted that the margin outlook for Hartalega is improving due to stronger glove demand and higher ASP from its Chinese counterparts, as well as better cost efficiency after decommissioning its Bestari Jaya facilities. 

Based on the firm’s conference call with the company’s management, it was noted that sales momentum for Hartalega remained strong, and utilisation rate is expected to improve to more than 80 per cent in the coming months. 

Hartalega’s management also indicated production lines, which are expected to add 2.3 billion pieces per year, are ready to accommodate the rising demand. The company is carefully planning to increase its capacity to 36 billion pieces per year by the end of FY25. 

It kept its “Buy” call on the company with a higher TP of RM4.50. 

Kossan’s results also came in within Hong Leong Investment Bank Bhd’s (HLIB Research) expectations, making up 13.2 . 2 per cent of its full-year estimates and 16.9 per cent of consensus’. 

HLIB Research expects Kossan to deliver sequentially stronger earnings in the coming quarters, underpinned by the commencement of the inventory replenishment cycle, potential trade diversion from the United States (US) to Malaysia as a result of US Food and Drug Administration import alert issues, and a higher import tariff on China in 2026, as well as a higher profit margin from economies of scale.

“On top of the recovery thesis in 2025, we do believe there are potential re-rating prospects for Kossan, considering its more favourable balance sheet and income statement profiles vs Hartalega.”

“Glove inventories amassed during the pandemic are believed to be near depletion, while its peer, Hartalega, received c.2.2 billion pieces of glove orders per month from March onwards.

“Furthermore, we gather that customers are more willing to accept a higher ASP in Q2 2024 to allow glove makers to pass on higher raw material and natural gas prices,” it said in a note. 

In a separate note, the firm added that Hartalega’s earnings for FY24 were in line with its forecast at 99 per cent but came below consensus at 32 per cent. 

“In terms of capacity, Hartalega’s internal target is to increase from 32 billion pieces per year in FY24 to 36 billion in FY25 by commissioning NGC 1.5. Nevertheless, this is dependent on market conditions.”

The research firm kept its “Buy” call on Kossan with an unchanged TP of RM3.23 and maintained “Hold” on Hartalega with an unchanged TP of RM3.62. 

Conversely, Public Investment Bank Bhd is cautious about Kossan’s operational landscape as it expects ASPs to remain stagnant. 

The US government has announced a tariff increase on the import of China’s medical gloves from 7.5 per cent to 25 per cent effective in 2026. 

“This development is expected to narrow the pricing gap between Malaysian and Chinese glove players, enhancing the competitiveness of Malaysian players and enabling them to gain a larger market share. 

“However, we believe the near-term outlook remains challenging due to the sector’s adjustment to global oversupply. 

“Additionally, the anticipated normalization of the dollar and ringgit exchange rate and rising operating expenses, particularly for natural gas and raw materials, suggest further difficulties for the industry’s operating environment despite recent signs of improved demand,” it stated in research notes for both Kossan and Hartalega. 

It said Kossan’s results were within its estimates at 28.5 per cent but below consensus expectation at 17.1 per cent of the full-year forecast, respectively. 

However, it said Hartalega’s FY24 core profit came in below both the firm’s and market expectations at 60 per cent 52 per cent full-year forecasts, respectively. 

“The discrepancy in our forecast was mainly due to lower-than-expected ASPs.”

The firm reiterated its “underperform” call for both stocks, with a higher TP of RM1.48 for Kossan and an unchanged TP of RM2.07 for Hartalega. 

Source: NST

Local glove sector turnaround to be boosted by US tarriff on China glovemakers

Semiconductor packaging and testing company, Siliconware Precision Industries Co Ltd (SPIL) today broke ground on its RM6 billion P1 plant at Bandar Cassia Technology Park, Pulau Pinang.

The state-of-the-art facility will sit on an eight hectare plot of land.

In a joint statement today, SPIL said over the next 15 years, the plant is projected to create nearly 3,000 skilled jobs, introduce advanced packaging and testing technologies and offer comprehensive turnkey solutions (including wafer bumping, wafer-level chip packaging, flip chip packaging and testing). “This initiative is expected to significantly reduce production cycles, enhancingefficiency and competitiveness in the semiconductor industry,” it said.

Investment, Trade and Industry (Miti) Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the groundbreaking of this RM6 billion investment by SPIL validates Malaysia not only as a preferred destination for global semiconductor companies, but also as a country that is serious on the swift implementation of investors’ commitments.

Tengku Zafrul said the National Semiconductor Strategic Task Force (NSSTF) – led by MITI – has been driving many key initiatives to attract and implement investments in this sector, supported by MIDA’s over 50 years of expertise.

“All these are key success factors for the New Industrial Master Plan 2030, which aims to increase economic complexity and forge stronger linkages betweenglobal companies and local SMEs, while creating more skilled, higher-paying jobs for Malaysians. “I am confident these initiatives will also help elevate our semiconductorsector’s position in the global value chain,” he said.

Meanwhile, SPIL Malaysia chief executive officer Michael Chang said the establishment of the P1plant will foster innovation in Penang, establishing an advanced packaging and testing base, cultivating semiconductor talents, and enhancing technological capabilities.

Chang expressed gratitude to MIDA and to Invest Penang for their guidance throughout the project, showcasing the successful collaboration between central and local governments.

He further noted that SPIL’s expansion aligns with global trends, positioning Malaysia as an important hub for East Asia and the global industrial supply chain.

“This strategic move will strengthen the global packaging and testing market, driving innovation and development within the group, and contributing to economic growth in the Oriental Silicon Valley,” he added.

SPIL is committed to environmental sustainability, having implemented multiple green manufacturing measures such as energy and water conservation, and waste reduction during the construction stage.

It plans to obtain Green Building Initiative (GBI) Green Globes Certification and achieve its 2050 net-zero carbon reduction goal through process improvements, green building energy conservation, and investments in green electricity.

Source: NST

Siliconware Precision breaks ground on RM6b semiconductor testing and packaging facility in Penang

Malaysia’s vibrant semiconductor industry bolsters its position as a reliable regional partner in manufacturing, trade, and innovation, said Prime Minister Datuk Seri Anwar Ibrahim.

As the world’s sixth-largest exporter of semiconductors, he said Malaysia boasts a robust manufacturing base, particularly in the global electronics and electrical industry.

Speaking at the 29th International Conference on The Future of Asia, Anwar highlighted Malaysia’s appeal amid escalating tensions and trade restrictions in microchips.

He said that with stability, skilled labour force and economic and geopolitical nonalignment, Malaysia stands as a safe haven for investors.

“The proof is in the numbers. In 2023, the state of Penang — where I came from … Malaysia’s semiconductor hub — attracted US$13 billion (RM61 billion) in FDI (foreign direct investment), exceeding the total for the previous seven years combined.

“We are setting our sights on the future through an increasingly strategic focus on front-end activities, such as wafer fabrication, the design of integrated circuits and advanced packaging,” he told the 300-strong forum participants.

Anwar also paid tribute to Japan’s role and support in Malaysia’s economic progress.

“Truth be told, this could not have been achieved without Japan and our other partners in the region. Etched in our memory is the humble beginnings in Penang during the 1970s, when companies such as Clarion and Hitachi were part of the ‘Eight Samurai’ — the first wave of electrical and electronics products (E&E) manufacturing investment into the country.

“Active Japanese FDI has been a crucial factor in the success of Malaysia’s semiconductor industry, and this is true even today, with recent large-scale investments coming in from Kaga Electronics and Ferrotec,” he said.

He added Japan and Malaysia shared a common vision for Asia’s future based on stability, connectivity and cooperation in support of a rules-based order, thus he is confident that both nations’ relations will only grow from strength to strength going forward.

“Prime Minister Kishida and I had two summit meetings in November and December, culminating in the upgrading of our bilateral relationship to a Comprehensive Strategic Partnership. We also expanded our cooperation into the realm of security, collaborating in the maritime security sphere,” he said.

Japan is Malaysia’s fourth-largest trading partner for nine consecutive years. In 2023, total trade between Malaysia and Japan was valued at RM156.64 billion.

Meanwhile, Malaysia is continuing to build its capabilities in other sectors in line with our economic complexity trajectory into chemicals, aerospace, pharmaceuticals, medical devices, the digital economy, electric vehicles, advanced materials and agro-based industries.

Anwar also highlighted Malaysia’s openness to trade and investment in manufacturing, services and the primary sector alike, evident in its FDI performance in 2023, which saw a 15 per cent increase compared to 2022, with approved foreign investments reaching RM188 billion.

Source: Bernama

Malaysia’s vibrant semiconductor sector a boost for regional trade, PM tells Japan

The Malaysia Autoshow 2024 commenced on Tuesday with several global automotive industry players debuting and unveiling their latest technologies at the six-day event running from May 21 to 26 at the Malaysia Agro Exposition Park Serdang (Maeps).

Among the prominent automakers showcasing their latest technology is Tesla Inc, making its inaugural appearance at the event, featuring its latest Model 3 Performance and the highly anticipated Cybertruck.

Tesla stated that the Model 3 Performance comes with an upgraded exterior, refined interior, and a performance-focused vehicle design, enabling owners to shatter their records.

Equipped with the latest generation drive unit, an all-new adaptive damping system, and Track Mode, the Model 3 Performance accelerates from 0 to 100km per hour (km/h) in just 3.1 seconds and offers up to 528km worldwide harmonised light vehicle test procedure (WLTP) range.

In addition to Tesla, Stellantis NV, the world’s fourth-largest automaker, made its highly anticipated debut at the Malaysia Autoshow 2024.

Following the successful launch of the all-new Peugeot 408 less than a month ago, the automaker continues its momentum by showcasing a lineup of exciting vehicles across three marques under Stellantis’ brand portfolios — Peugeot, Citroen, and Leapmotor.

Stellantis Malaysia managing director Jamie Francis Morais said the company had a fantastic start with the all-new Peugeot 408 launch last month, with over 300 bookings and counting to date, demonstrating the car’s undeniable appeal.

“Next, we are looking at how we can further cater to different consumer preferences and lifestyles, be it by reviving iconic brands such as Citroen or introducing new ones like Leapmotor for those interested in owning an electric vehicle (EV) in the near future,” Morais added.

Additionally, NETA Auto made its debut at the Malaysia Autoshow 2024 event, presenting its entire family of vehicles for the first time in Malaysia.

Its vice president, Zhou Jiang, highlighted the company’s impressive achievements over the past three years, including leading sales among new car-making forces in China and rapid global expansion, with a particular focus on the Malaysian market.

“In the next three years, we plan to introduce four main products with a total sales target of 34,000 units.

“Our factory in Malaysia is set to start production in the first quarter of 2025, and we aim to open 50 sales outlets, creating approximately 3,000 jobs,” he said.

Meanwhile, Smart Malaysia unveiled the all-new smart #3 sport utility vehicle (SUV) Coupe, available in Brabus, Premium, and Pro models, tailored for the Malaysian market.

“As we gear up for the commencement of deliveries in the third quarter this year, our 13 dealerships are fully prepared to provide exceptional service,” according to its statement.

Source: Bernama

Global automakers unveil latest tech at Malaysia Autoshow 2024

The vision to make Malaysia an automotive export hub is highly achievable on the back of the government’s robust policies such as the National Automotive Policy 2020 (NAP 2020) and the New Industrial Master Plan 2030 (NIMP 2030), said Investment, Trade And Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz

He said key initiatives that support this vision include the National EV Project led by Perodua, Proton’s electric vehicle production, and the development of the Automotive High-Tech Valley (ATHV) by DRB-Hicom.

“Looking ahead, with the support of all industry players and key stakeholders, I am confident Malaysia will remain a destination for investments that can deliver growth for its people and businesses,” he said at the launch of Malaysia Autoshow 2024 today.

NAP 2020, originally launched for the period 2020 to 2030, is now approaching its halfway mark.

Therefore, Tengku Zafrul said Miti together with MARii, will be undertaking a midterm review of NAP 2020, to take into account the rapid advancements in technology, particularly in the realm of energy-efficient vehicles (EEV) and electric vehicles (EV).

He added that the goal is not only to stay relevant but to strive for excellence in promoting a thriving Malaysian automotive ecosystem.

“Rest assured, the consultation process will be comprehensive, covering key stakeholders to address industry concerns and capitalise on emerging opportunities,” he said.

Tengku Zafrul said NAP 2020’s vision is to make Malaysia a regional manufacturing powerhouse for next-generation vehicles (NxGV), EV and EEV.

Meanwhile, he added, NIMP 2030 will propel the automotive industry by transforming Malaysia’s industrial landscape to support high-growth and high-tech industries.

“We are proactively strengthening our E&E, chemicals, and automotive manufacturing capacity to support, for example, the supply side of the EV value chain, including the development of affordable EVs,” he said.

Tengku Zafrul pointed out that Malaysia’s automotive industry is currently the second largest in Southeast Asia.

“With Total Industry Volume of 799,731 units, globally we were ranked number 23 in 2023,” he said.

In the first quarter of 2024, he said, the EV market continued its development, with nearly 11,000 units of battery electric vehicles and hybrids sold.

“Our automotive sector stands out as a cornerstone of our nation’s economy, evidenced by substantial multi-billion ringgit investments from both local and foreign investors, as well as aggressive business expansions,” he said.

On talent, Tengku Zafrul said that Miti has taken steps to create a pipeline to support the development of skilled, STEM and TVET talent to feed into the high-tech industries, including automotive.

On May 11, he shared the first cohort of 94 workers who graduated from the upskilling programme by Malaysia Productivity Corporation.

“There are 28 cohorts for 2024 alone. We hope to have this programme on a continuous basis, so the tech-based industries – including the automotive industry – can rely on a robust talent pipeline,” Tengku Zafrul said.

The minister also said that the growth in the automotive industry will be supported by regional trends that promote economic growth and ecosystem development, consumer demand, as well as the introduction of models by automotive OEMs.

“In 2023 alone, we saw evidence of this growth through the launch of 67 new models. If you ever get the chance to visit a few of Malaysia’s automotive hubs, whether in Shah Alam, Rawang, Tanjung Malim, Gurun, or Pekan, you can feel the strong vibes of this industry’s rapid growth,” said Tengku Zafrul.

Source: Industry

Vision to make Malaysia auto export hub highly achievable: Tengku Zafrul

Sarawak is poised to emerge as a key hub for green hydrogen production, thanks to its strategic location and abundant renewable energy resources, particularly hydropower.

Prof Christoph Menke from the University of Applied Sciences Trier in Germany said Sarawak’s central position relative to major markets like China, Korea, and Japan makes it an ideal candidate for green hydrogen production.

“With significant investments in renewables, including floating photovoltaic systems on hydro dams, Sarawak can supply the necessary renewable electricity for green hydrogen production,” he told The Borneo Post in a recent interview in conjunction with the coming Asia Pacific Green Hydrogen (APGH) Conference & Exhibition 2024.

“Additionally, its ample land and biomasss resources position it as an export centre for PTX products like methanol, ammonia, and e-koresene to high-demand regions such as China, Korea, and Japan.”

PTX is the acronym for ‘Power-to-X’, which stands for the conversion of renewable electricity into material products, represented by the ‘X’

An esteemed expert in energy technologies, Menke boasts extensive experience in various fields including combined heat and power, industrial energy efficiency, and solar thermal technology.

His expertise extends to senior advisory roles in energy policy, energy systems analysis, and planning.

Since 2000, he has been deeply involved in energy policy planning across ASEAN countries, contributing his insights to nations like Thailand, the Philippines, Indonesia, and Vietnam.

Menke commends Sarawak’s rapid progress in green hydrogen initiatives, citing strategic planning, resource availability, and international interest as key drivers.

He said Sarawak has concrete investment plans and securing long-term contracts with off-takers in China, Japan, and Korea were pivotal steps.

Menke also stresses the importance of pilot projects for gaining practical experience essential for industry scaling, acknowledging Sarawak’s inherent advantages despite being in the early stages of development.

“What is necessary is to start getting your feet wet with pilot projects because this transition of investment will require substantial changes in the entire production, handling, and shipping processes.

“This transformation doesn’t happen overnight. It takes 10, 15, even 20 years to incorporate the lessons learned from sandbox experiments,” he said.

“In principle, the resources are there, although they haven’t been fully developed yet. We are at the very beginning.

“The renewable energy demand will be vast, necessitating substantial investment in renewable energy to build up the hydrogen industry in Sarawak.”

Menke also emphasised the need for strong government support and private sector involvement, suggesting a focus on cluster development akin to successful models like the European port of Rotterdam.

“Additionally, this development requires the cooperation of universities and research institutions because we are dealing with new technologies and processes that need to be developed.”

In this respect, Menke advocates for cross-border collaborations within Southeast Asia, noting each country’s unique renewable energy advantages.

“Southeast Asia has a great future if countries work more closely together. Each country has its unique advantages; Laos with hydropower, Indonesia with geothermal energy, Vietnam and the Philippines with offshore wind, and Sarawak with hydropower.

“So my argument always is that a strong electricity grid in Southeast Asia is essential for achieving major proportions of renewables.

“If each country attempts to develop renewables independently, it will be too expensive and challenging to reach high percentages of renewable energy. A cooperative approach, similar to Europe’s integration of wind in the north, hydropower in the Alps, and solar in the south, is crucial.”

Menke also noted the importance of building trust and strong cooperation among Southeast Asian countries.

“This collaboration will not only enhance renewable energy capacity but also improve logistics and production efficiency for hydrogen.

“In my opinion, fostering strong cooperation and building trust among Southeast Asian countries should be the number one priority. This will allow Sarawak to leverage its strategic location and logistical connections to become a major player in the green hydrogen market.”

Therefore, conferences and exhibitions, such as the Asia Pacific Green Hydrogen (APGH) Conference and Exhibition 2024 play a crucial role in fostering international collaboration and knowledge sharing within the green hydrogen sector.

“We are talking about a pretty new thing,” said Menke.

Menke reflected on his experience with the Renewable Energy Asia Conference, recalling the scepticism towards renewables decades ago.

He noted that it took 20 years to form a consortium of stakeholders, comprising government regulators, utility companies, the private sector, academia, and NGOs.

“These groups had to learn to work together, communicate, and exchange opinions. Conference and exhibitions are where these different stakeholders meet and interact.”

Menke said it was not enough to attend conferences in Europe, America, or Australia, adding that regional participants were needed from countries like Indonesia, the Philippines, Thailand, and Singapore to share their experiences, and learn from each other.

“Regional cooperation is essential for the development of green hydrogen.

“Without regional conference and exhibitions, the sector cannot take off. It took 10 to 15 years for the Renewable Energy Asia conference to build this trust and establish a foundation for collaboration. These gatherings are necessary to develop confidence in new technologies and approaches among regional stakeholders.”

For more information on the Asia Pacific Green Hydrogen (APGH) Conference & Exhibition 2024, go to www.hydrogenapac.com

Source: Borneo Post

Expert: Sarawak has makings of green hydrogen production hub

AS Malaysia finalises its Semiconductor Strategic Plan (SSP), expectations are high for a roadmap that will not only attract global players but also elevate local firms in the electrical and electronics (E&E) sector.

The Ministry of Investment, Trade and Industry (Miti) is set to unveil the comprehensive strategic plan for the country’s semiconductor industry by as early as the end of this month.

Stakeholders, investment promotion agencies and industry players are eagerly anticipating measures that will ensure Malaysia’s ascension up the E&E value chain, a goal that has been discussed for the past five years, but tangible steps have yet to be taken.

This strategic initiative comes at a crucial juncture as Malaysia seeks to capitalise on its competitive advantage amid the ongoing US-China chip war and trade diversion.

Being the world’s sixth largest exporter of electronics and semiconductors, Malaysia plays a critical role in the global E&E supply chain. For perspective, the country is responsible for 7% of semiconductor trade flows, as well as 13% of back-end operations globally, including chip testing and packaging.

Notably, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz reportedly said last month: “The semiconductor sector is critical to the country’s economy. Given our market share in the semiconductor industry, we need to have a concrete and strategic plan. The timeline given to us is until the end of May.”

Earlier in April, Prime Minister Datuk Seri Anwar Ibrahim said the National Investment Council, which he chairs, had decided that Miti would draw up a comprehensive SSP to attract foreign semiconductor companies to establish high-quality chip manufacturing facilities in Malaysia.

So, what are the key demands and aspirations of players in the E&E and semiconductor industries? Do they expect the upcoming SSP to prioritise the growth of local firms or focus on attracting foreign players? More importantly, what are the main strategies and areas of focus envisioned in the plan, and will there be any new incentives?

When contacted by The Edge, Miti declined comment, saying that the ministry was “in the final stages” of preparing the SSP.

Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai points out that the country already has its E&E aspirations laid out in the 12th Malaysia Plan (12MP), National Investment Aspirations (NIA) and New Industrial Master Plan (NIMP) 2030.

However, the semiconductor landscape is experiencing “rapid tectonic shifts” with developments in technologies such as artificial intelligence (AI), as well as the Fourth Industrial Revolution (IR4.0), environmental, social and governance (ESG) compliance and geopolitical tensions between the US and China. Therefore, Malaysia needs to regularly review and update its plans to meet the challenges facing the country’s E&E industry, including talent development.

“The SSP should have an overarching ambition and vision for Malaysia that is holistic, comprehensive [one that includes all the enablers], have specific focus areas and detailed action plans, with owners and timelines,” Wong tells The Edge.

“The SSP should be regularly reviewed for performance and updated to reflect the current environment. As the global competition for semiconductors is intense, Malaysia needs to constantly improve the ease of doing business, develop more talent and be globally competitive.”

Over the years, local semiconductor and semiconductor-related firms, especially the public-listed ones, have been mostly involved in the mid- to lower-end of the value chain, serving foreign semiconductor manufacturers, brand owners, integrated circuit (IC) developers and fabricators.

The first group comprises outsourced semiconductor assembly and test (OSAT) companies such as Inari Amertron Bhd (KL:INARI), Malaysian Pacific Industries Bhd (KL:MPI), Unisem (M) Bhd (KL:UNISEM), Globetronics Technology Bhd (KL:GTRONIC) and KESM Industries Bhd (KL:KESM).

The second group consists of automated test equipment (ATE) firms such as ViTrox Corp Bhd (KL:VITROX), Pentamaster Corp Bhd (KL:PENTA), Mi Technovation Bhd (KL:MI), QES Group Bhd (KL:QES), TT Vision Holdings Bhd (KL:TTVHB), Aemulus Holdings Bhd (KL:AEMULUS), Elsoft Research Bhd (KL:ELSOFT), MMS Ventures Bhd (KL:MMSV) and VisDynamics Holdings Bhd (KL:VIS).

Then there are the likes of JF Technology Bhd (KL:JFTECH), FoundPac Group Bhd (KL:FPGROUP), UWC Bhd (KL:UWC) and SFP Tech Holdings Bhd (KL:SFPTECH). These are engineering firms that produce precision parts, components and other important materials for semiconductor manufacturing and testing activities.

However, there aren’t too many players at the front end of the semiconductor manufacturing process that are focusing on IC design.

Wong says one of the biggest expectations is for the SSP to make the E&E industry and its ecosystem relevant and competitive.

“With over 50 years of experience, Malaysia has made significant improvements to strengthen its supply chain. However, it needs to continue striving to not only keep up with technology but also to broaden and deepen its semiconductor ecosystem and continue to invest and innovate up the value chain,” he adds.

Officially registered in January 2021, MSIA is an association of individuals and companies incorporated in Malaysia that are involved directly or related to the semiconductor industry and its supply chain.

Small window of opportunity

From its origins as a labour-intensive and low-value-added industry, Penang’s E&E sector has evolved into a capital-intensive, knowledge-based and high-technology hub. Today, the state has earned the moniker “Silicon Valley of the East” for its robust E&E ecosystem.

This transformation began in the 1970s when eight major players known as “The Eight Samurai” — Intel, Robert Bosch, Clarion, Advanced Micro Devices (AMD), Hewlett-Packard (now Keysight Technologies and Agilent Technologies), Litronix (now Osram Opto Semiconductors), Hitachi (now Renesas Electronics) and National Semiconductor — established operations in Penang. While National Semiconductor is no longer operating in Penang after its acquisition by Texas Instruments, the legacy of these pioneering companies laid the foundation for Penang’s reputation as a global E&E powerhouse.

Despite the state’s long-standing reputation as an established E&E hub, there had not been a national semiconductor roadmap until recently. So, why is there a pressing need for a comprehensive strategic plan now?

Invest-in-Penang Bhd (InvestPenang) CEO Datuk Loo Lee Lian opines that the geopolitical competition between the US and China has given Malaysia a “once-in-a-generation opportunity” to reorganise the country’s place in the global supply chain.

“With intense competition for FDI (foreign direct investment) from other Asean countries and India’s ambitions for the industry, the comprehensive strategic plan is urgently required to streamline our resources, formulate our strategies and identify which part of the value chain Malaysia should focus on and strengthen. We have only a five-to-eight-year window to capture this opportunity,” she tells The Edge.

For that, InvestPenang suggests that the strategic plan for the semiconductor industry enhances the resilience and stickiness of Malaysia’s E&E supply chain and incentivises gaps. The SSP should also focus on high-quality projects, selected based on its strategic contribution, technology sustainability and skill transfer to preserve and prevent resource exhaustion.

“We need to identify and strengthen each state’s competitive advantages to compete on the global front instead of internally. Besides, the plan should empower our local companies to expand into the global value chain,” she says.

Loo also says the success of NIMP 2030 depends largely on the availability of talent and the readiness of the workforce in science, technology, engineering and mathematics (STEM). “A national talent blueprint is needed to address human capital strategies and build a sustainable STEM workforce.”

InvestPenang is the principal investment promotion agency of the state government.

BlueChip VC Sdn Bhd co-founder Datuk Lai Pin Yong concurs that there is a “heightened sense of urgency” for Malaysia to capitalise on its competitive advantage.

“Given global trends and the US-China chip war, there is an urgent need for comprehensive strategic planning and swift execution as the window of opportunity is less than five years. Building consensus among government, industry and the public is essential, with a focus on educating young people on high-tech careers and fostering closer public-private partnerships,” he says.

To capitalise on the window of opportunity created by external factors such as the US-China trade tensions and growing chip demand, Lai says it is essential for Malaysia to come out with a systematic implementation plan driven by political will.

“Emphasis on STEM education, from schools to institutions of higher education, alongside broader societal support, is crucial. Malaysia should aim to establish itself as a key semiconductor hub, mitigating global risks by diversifying chip production away from regions prone to instability,” he adds.

“Increased offerings of semiconductor-related courses at institutions of higher education and technical colleges, alongside greater intakes of engineering students, are crucial.”

George Town-headquartered BlueChip VC started out as a specialised technology fund in early 2023. Its main objective is to nurture Penang-based semiconductor companies in three promising segments — advanced packaging, IC design and niche equipment — and eventually have them listed on Bursa Malaysia.

Lai, a semiconductor veteran turned venture capitalist, was among the pioneer batch of Malaysian engineers when Intel set up shop in Penang in 1972 — the US chip giant’s first overseas manufacturing facility.

According to him, Penang’s semiconductor industry, while successful, faces constraints such as land scarcity, water shortages, congestion and a lack of engineers. To address these challenges, strategic planning should focus on complementary development across Malaysia.

“Penang could transition mature manufacturing processes to other regions while upgrading to higher-value activities. A national semiconductor corridor along the west coast could distribute semiconductor activities across various states, reducing congestion in Penang,” says Lai.

Expanding beyond Penang

Interestingly, the Selangor government, through its digital economy arm Selangor Information Technology and Digital Economy Corporation (Sidec), is leading the establishment of an IC design hub in Puchong, touted to be the largest in Southeast Asia. The project — in collaboration with the federal government, international semiconductor firms and venture capitalists — is said to be a strategic move to position Malaysia as a potential powerhouse in the global IC design industry.

The proposed IC Design Park, poised to begin operations by July 2024, has already secured the commitment of four partner companies — ARM Ltd, Phison Malaysia, SkyeChip Sdn Bhd and Shenzhen Semiconductor Industry Association.

To comply with the evolving green standards and ensure long-term growth, Sidec CEO Yong Kai Ping says Malaysia could leverage a multi-pronged approach.

“Instead of internal competition, we can seek partnerships and resource diversification across the region, collaborating with advanced industrial states like Penang, Selangor and Johor to ease the burden on specific areas in Malaysia. This would allow local companies to flourish and participate in the global value chain,” he points out.

Yong goes on to say that Malaysia’s existing specialisation is a strength and the synergies to be derived between the states could foster a robust E&E ecosystem. For instance, Penang and Kulim excel in back-end testing, packing and fabrication, while Selangor focuses on front-end fabless IC design.

“While we focus on internal competition topics, we may overlook external competitors like Saigon High Tech Park in Vietnam that present a significant challenge. This 700ha park houses the entire IC design, fabrication, testing and packaging supply chain under one roof,” he says.

“Additionally, Vietnam is actively investing in talent development through collaborations with universities, building testing labs and training programmes [in South Korea] to increase their pool of IC designers [currently at 3,000].”

Therefore, says Yong, Malaysia needs to rival and do better than Saigon High Tech Park, which could develop to be as capable as the tech parks of Penang, Kedah and Selangor combined, looking at its current rate of development.

MSIA’s Wong says the SSP should provide Malaysia a clear focus and path forward to achieve its aspirations, so states in the country should not view each other as competitors.

“We should complement each other and enable those states with such goals to flourish. Other states [outside Penang] will provide choices to investors, both local and foreign,” he adds.

“It is important that we focus on global competition as it is intense and every other country wishes to have a piece of the semiconductor pie. We need to constantly keep up with technology and improve in every aspect of doing business to ensure Malaysia is a choice location for investments.”

Given the ongoing geopolitical tensions, Wong says the competition for semiconductor supremacy is “a continuous race with no finishing line”.

“There must be no complacency and we need to have a good plan that keeps all stakeholders humble and accountable. We need the whole country to support and nurture the semiconductor and E&E industry to become the ‘Golden Goose of Malaysia’,” he adds.

On industrial park development, BlueChip VC’s Lai says joint ventures between the government and private sector to develop integrated smart industrial parks can support advanced manufacturing. “Speculative land activities in industrial areas should be discouraged to maintain affordability and attract investors,” he notes.

FDI and DDI equally important

MSIA’s Wong is of the view that the country’s E&E industry needs both FDI and domestic direct investment (DDI) to thrive.

For the past three years from 2021 to 2023, the E&E industry in Malaysia recorded RM262.7 billion of investments. The bulk of these were FDI (97.6%) and only 2.4% were DDI.

“Clearly, Malaysian players are not investing sufficiently in technology, R&D and facilities. Most of the time, these FDI bring with them the latest technology to be deployed in Malaysia,” he points out.

“Malaysian companies need to invest and keep up with technological developments and seize the opportunity to develop new products, equipment and services to support the growth path of these multinational corporations (MNCs).”

Wong says developing Malaysian companies to become global champions and encouraging more entrepreneurs to enter the E&E industry should be one of the priorities of the SSP.

BlueChip VC’s Lai reiterates that the imperative for Malaysia’s E&E industry is to ascend the value chain in tech content and output. Thus, the aim of the strategic roadmap for the Malaysian semiconductor industry is to elevate both technology and value. This plan should entail introducing higher technology throughout the industry, particularly in semiconductor IC design, advanced packaging and equipment.

“As MNCs expand and enhance their technological capabilities, they require a highly skilled workforce, especially engineers and technicians. Incentivising the migration of high-tech jobs from foreign-invested companies to local firms, investing in R&D and IP (intellectual property) development, and attracting skilled talent to Malaysia are key components of this strategy,” he says.

Departing from conventional incentives, Lai believes Malaysia should offer incentives tailored to technology transfer and R&D investment, regardless of whether the companies are domestic or foreign.

“Key performance indicator-driven incentives, such as subsidies, grants, low-interest loans and tax incentives, should be designed to promote specific outcomes. Furthermore, R&D should encompass the development of highly skilled personnel, including support for advanced education. An open policy to attract skilled professionals globally is crucial, with incentives focused on achieving specific KPIs rather than broad tax holidays,” he proposes.

Sidec’s Yong says the semiconductor industry currently faces two major pain points: significant upfront technology investments and securing a steady stream of skilled talent. As a result, a lot of resources and incentives need to be invested to overcome these hurdles.

By taking a leaf from the European Union’s €1.8 billion Chip Fund for Pilots Initiative, Malaysia could establish a dedicated programme to bridge the gap between concept and production for local semiconductor start-ups and small and medium enterprises.

“This programme could offer early-stage funding that provides crucial financial resources for promising projects, reducing the barriers to entry for local talent. It could also offer technical support that provides access to technology and expertise, accelerating the development and commercialisation of innovative ideas,” he says.

The highly anticipated SSP is expected to mark a pivotal moment in the nation’s journey towards moving up the E&E value chain. As the E&E landscape expands beyond Penang to other states in Malaysia, all eyes are on Miti’s comprehensive strategic plan to propel the country towards a more robust and diversified semiconductor industry in the years to come. 

Source: The Edge Malaysia

Chipping in to move up the E&E value chain

Manufacturing expertise built over 40 years instilled confidence in GWM and BAIC to collaborate 

AUTOMOTIVE manufacturer, EP Manufacturing Bhd, was on the lookout for new business ventures when its attention turned to electric vehicles (EV) and energy-efficient vehicle (EEV) manufacturing business. In a short period, it became a key area for the company to diversify its operations. 

Group CEO Ahmad Razlan Mohamed said after conducting feasibility studies, it was determined that this area is a promising business venture for its car assembly business. 

How did this come about? Ahmad Razlan explained the journey in a recent interview with The Malaysian Reserve (TMR). 

Listed in 1997, EP Manufacturing is an industrial group that supplies modular assemblies, safety and critical components to major carmakers. The group aims to become a leading automotive player in Malaysia’s EV market but is also not shy to venture into other businesses such as tourism. 

The company recognised that automotive parts component manufacturing is a challenging industry, and it was not alone in facing this pressure. 

“We sought to diversify into areas closely related to our traditional business. This led us to enter the car assembly industry. During our business development efforts, Great Wall Motor Co Ltd (GWM) approached us with an interest in collaborating on car assembly. Together, we conducted feasibility studies and planning,” said Ahmad Razlan. 

GWM is a Chinese privately owned automobile manufacturer headquartered in Baoding, Hebei. Founded in 1984, it is currently the eighth-largest automobile manufacturer in China. 

“At the same time, during our visit to China, as we were exploring various business opportunities and researching the car assembly industry, Beijing Automotive Group Co Ltd (BAIC) approached us with a keen interest in collaboration,” he added. 

BAIC is one of China’s largest carmakers and a Fortune Global 500 company. 

“I believe our reputation in the market, built over 40 years of experience, instilled confidence in them (Great Wall Motor and BAIC) regarding our manufacturing expertise. We mutually agreed to pursue this business opportunity,” explained Ahmad Razlan, who assumed the role of EP Manufacturing group CEO on March 20, 2023. 

Previously, he spent almost seven years as a director for corporate advisory at Prokhas Sdn Bhd, a company owned by the Ministry of Finance (MOF). Prokhas was established to oversee the residual assets of Pengurusan Danaharta Nasional Bhd following its closure in December 2005. 

However, EP Manufacturing encountered some challenges, including the need for significant capital investment. The new business also demanded quality assurance of the machines and equipment as well as obtaining regulatory clearances from the government. 

On July 11, 2023, it managed to secure from the Ministry of Investment, Trade and Industry (MITI) a manufacturing license to manufacture and assemble four-wheeled EEVs, EVs and electric commercial vehicles. 

Then, on Oct 18, 2023, the group signed a memorandum of understanding (MoU) with BAIC International Development Co Ltd and Great Wall Motor Sales Malaysia Sdn Bhd (GWM Malaysia) to enable the local production of sport utility vehicles (SUV), internal combustion engine (ICE) vehicles and EVs. 

Partnerships 

In January, EP Manufacturing announced that its subsidiary, PEPS-JV (Melaka) Sdn Bhd (PJVM), will serve as the contract vehicle assembler for the Malaysian unit of China’s GWM for the next eight years. EP Manufacturing’s focus will be on assembling and producing GWM’s Haval H6 and Haval Jolion SUV models. 

The assembly activities will take place at the Melaka facility, aiming for an annual output of 20,000 units by 2028. Additionally, the facility will cater to the production of BAIC vehicles. 

In April, EP Manufacturing announced its partnership with BAIC to assemble and manufacture BAIC’s authorised model vehicles in Malaysia. Its wholly owned subsidiary, PJVM, had finalised an agreement with BAIC. 

Under the terms of the 10-year agreement, PJVM will be responsible for assembling and manufacturing the vehicles in Malaysia, with a targeted capacity of at least 5,000 vehicles per year by Sept 1, ramping up to 10,000 vehicles annually by March 1 of the following year. PJVM will also handle the procurement of all necessary devices, equipment, permits or approvals for vehicle assembly and manufacturing. 

In return, BAIC will authorise PJVM for assembly and manufacturing, provide technical support and training, and oversee the assembly process. 

The agreement superseded a MoU signed in August 2023, focusing on developing BAIC’s BJ40P and X55II SUVs and right-hand drive EVs for Malaysia and other Southeast Asian markets. 

“They (BAIC and GMW) are our clients. We have a vehicle assembly agreement with them, which stipulates what are our obligations and what are the forecasts of the cars and models that we are going to assemble for them in this country. 

“We get the factory, machinery, and personnel ready. They supply us with their complete knocked-down (CKD) kits, we assemble them, and we charge certain fees for the service. We refer to it as assembly fees,” he added. 

Meeting Market Demands

As a Tier-1 automotive supplier, EP Manufacturing operates five plants and factories throughout Malaysia. It provides modular assemblies, safety components and critical parts to leading car manufacturers, including Proton Holdings Bhd, Perusahaan Otomobil Kedua Sdn Bhd (Perodua), Honda Malaysia Sdn Bhd and Mazda Malay- sia Sdn Bhd. Additionally, it also serves Kia Malaysia Sdn Bhd to some extent. 

In its core business, the auto parts manufacturer is anticipated to persist in delivering cost-saving advantages to industry players, particularly original equipment manufacturers (OEMs). This entails ongoing negotiation and collaboration with them. 

“We have to continue focusing on managing our costs. It’s a highly competitive landscape. We need to ensure that our processes are efficient, our manufacturing practices are up-to-date, and continuously improved so that we can effectively manage our costs. 

“And since industry players, especially the OEMs, expect us to provide ongoing cost reductions to them. 

“It is common in this industry that after a couple of years — typically in long-term contracts — such as those with Proton or Perodua spanning five years, they expect process improvements and efficiency, leading to cost reductions. So, that’s the challenge we have to address. 

“We aim to achieve revenue growth and improve our bottom line from 2024 onwards,” he said. 

For the year ended Dec 31, 2023 (FY23), EP manufacturing posted a net profit of RM18.6 million on a turnover of RM648 million compared to a net profit of RM399,000 on a turnover of RM516.3 million in FY22. 

Expanding Sungai Petani Plant

Concurrently, Ahmad Razlan stated that the group is exploring the expansion of its facility in Sungai Petani, Kedah, to better serve its Mazda clients. 

The plant was set up by the group’s 60%-owned subsidiary, Peps Y-Tec (M) Sdn Bhd, in partnership with Y-tec Corp (a Tier-1 supplier for Mazda Japan), to produce body panels and chassis assemblies for Mazda CX5 and Mazda 3 models. Operations began in August 2016. 

He believed that because the group’s main business was thriving and its clients were satisfied, there is a strong interest in expanding its factories. 

Apart from its Kedah plant, the group operates two factories in Selangor, located in Batang Kali and Shah Alam, and a new factory in Melaka. 

The group has also opened a two-wheeler assembly line in Shah Alam for the assembly of EV bikes under its wholly-owned subsidiary EP Blueshark Sdn Bhd. The facility boasts a production capacity of 12,000 units per year and was operational in April 2024. 

EP Manufacturing announced in a filing that it will start building a new vehicle assembly plant in Melaka. The plant, set to be constructed in phases at the Hicom Pegoh Industrial Park, will receive over RM100 million in investment. Upon completion, it will have the capacity to produce up to 30,000 EEV and EV vehicles annually in its initial phase. The plant will manufacture and assemble vehicle models for BAIC and GWM. 

It added that the initiatives implemented so far are part of the group’s efforts to navigate its businesses amid the global transition towards gradually phasing out internal combustion engine vehicles. These efforts are aimed at ensuring the sustainability of the group. 

It plans to strengthen its core business segments and explore new market opportunities. The new CKD plant is expected to enhance the existing business by creating more opportunities for manufacturing automotive components in the future. 

---

Exploring Sabah property market, tourism 

IN 2022, EP Manufacturing had acquired property developer Kensington Development Sdn Bhd from Pacific Novel Ltd for RM45.6 million. 

The company has completed three major projects in Taman Seri Pelangi, Kota Kinabalu, Sabah, with a gross development value (GDV) of over RM40 million. 

These investments illustrate the group’s dedication to broadening its portfolio and strengthening its foothold in the property development sector. 

“Our primary focus has consistently been automotive manufacturing. However, we also engage 

in other ventures, including property development, boasting a land bank of over 13 acres (5.26ha),” said Ahmad Razlan. 

However, he said demand for property in Kota Kinabalu was mixed, with some viewing an oversupply. 

A report by Knight Frank Malaysia titled “Real Estate Highlights 2H23” suggested that Sabah’s housing market was predominantly buyer-oriented, with condominiums/apartments accounting for the majority of existing stock, totalling approximately 54,119 units. 

During the review period, mixed-use developments’ retail components in food and beverage offerings have gained popularity. 

Several notable retailers entered the Kota Kinabalu market, indicating a promising future for the state’s retail segment. 

“We are currently exploring partnerships with reputable firms to ensure that our land assets can realise their full potential in terms of GDV and increase in value. 

“At present, negotiations are ongoing. Our aim is to launch at least one project in Kota Kinabalu by 2024, utilising our existing land alongside a reputable partner. 

“We are cautious about venturing into areas where we lack expertise, to effectively manage risks in property development. Therefore, we are likely to seek a joint venture partner to develop our land and market the resulting products,” he concluded. 

While Ahmad Razlan under-represented the group’s dedication to its primary automotive manufacturing business, he also conveyed a willingness to explore opportunities for potential diversification. 

Tourism is among the sectors under focus. Sabah tourism authorities are targeting three million tourist arrivals this year, an increase from 2.8 million in 

2023. This revised goal stems from the state’s thriving tourism sector, which generated RM4.6 billion in receipts last year. 

“We noticed that the tourism industry in Sabah is booming and it’s continued to attract a lot of attention from players, not only from Sabah itself but also from Peninsular Malaysia,” he said. 

EP Manufacturing is cautious and planned to continue evaluating opportunities and conducting a proper feasibility study to ensure responsible investment. 

Currently, it has not finalised any venture in Kota Kinabalu, but remained open to possibilities. 

Source: The Malaysian Reserve

EP Manufacturing makes bold EV venture

Setting off on the road less taken is opening oneself to much trepidation and worry. But the adventure and learning from that journey are always well worth it. Negeri Sembilan-based developer Seri Pajam Development Sdn Bhd (Seri Pajam), a specialist in residential and commercial products, is developing a 523.23-acre industrial park called SPD Tech Valley.

Situated in Senawang, the RM3 billion SPD Tech Valley, which will hold its groundbreaking ceremony on May 20, is slated to be the first LEED for Cities and Communities Gold-certified industrial park in Southeast Asia and the first managed industrial park that adheres to ESG (environment, social and governance) standards in Negeri Sembilan.

The target market for the industrial park comprises global players in the tech industry, such as data centres and semiconductors, as well as similar or related companies looking for a place that adheres to their corporate ESG requirements.

Seri Pajam CEO Thomas Ten Wee Seong says: “Some industrial parks focus on investors [who buy and flip the property], but our industrial park focuses on the owners and tenants. We focus on global players and those in the surrounding Senawang area who want to expand their business.” Thomas adds that if the company sold only to investors, the initial bottom line would be good, but it would not be sustainable in the long term.

As SPD Tech Valley is an industrial park that adheres to ESG, Thomas says its master plan and facilities are “inspired and guided by ‘International Guidelines for Industrial Parks’ by UNIDO (United Nations Industrial Development Organisation). During the design stage, we also referred to the United Nations Sustainable Development Goals (SDG)”.

In addition, the Ministry of Housing and Local Government guidelines, along with all local authority directives and policies, were also adhered to.

Seri Pajam acquired the land by signing the sale and purchase agreement in 2022, and the deal was completed in the third quarter of 2023. Before considering the land to be used for an industrial park, Thomas and his team had planned to do something that involved their bread-and-butter business.

“We had an opportunity to acquire this land for residential development. Because Senawang is an industrial town in Negeri Sembilan, we thought why not diversify our operations for a new revenue stream so that we don’t have to rely on residential and commercial income,” he says.

“Also, the government announced two major plans — the NIMP20230 (New Industrial Master Plan 2030) and NETR (National Energy Transition Roadmap). We were already moving [in tandem] with these two plans, because our plan was to generate green energy and cater for more high-tech industries such as the semiconductor industry.”

Another reason, he adds, is the China Plus One strategy, which has resulted in companies’ setting up other manufacturing facilities or factories outside China to prevent over-reliance on Chinese manufacturing. Seri Pajam wants to offer its industrial park as an option for these companies.

At the right time

The company was founded by Datuk Ten Ah Man, Thomas’ father, in 1994. Prior to that, Ah Man co-founded construction outfit Bukit Maju Development Bhd and gained experience and expertise by being the main construction contractor for the 6,233-acre Putra Nilai (formerly Bandar Baru Nilai) by BBN Development Sdn Bhd, a subsidiary of public-listed Nilai Resources Group Bhd (formerly PK Resources Group Bhd).

Over the years, Seri Pajam has built up a competent and reliable senior management team as well as a host of young and vibrant professionals. Today, the developer has grown to more than 250 staff, with senior management comprising individuals with more than 20 to 30 years’ experience in fields such as quantity surveying, accounting and engineering in the construction industry. The younger employees come with a varied background in architecture, civil engineering and marketing, among others. It is this combination of experience and youthful energy that has put the company in a position to venture into the industrial sector.

“We had no knowledge about developing an industrial park. So, we got help from many parties, especially Invest NS (Negeri Sembilan). [Invest NS CEO] Datuk Najmuddin Sharif Sarimon and the team helped a lot with the planning and getting the clients, and were the source of guidance for me — from zero until we could launch our project,” says Thomas.

He says through the Malaysian Investment Development Authority (Mida), which provided much-needed assistance, Seri Pajam learnt that demand from industrial players was high.

“Mida has first-hand information [of industrial players]; there is a long list of foreign and direct investors that want to set up their business in Malaysia.”

While it took time to adapt in a field that was outside their expertise, Thomas and his team decided it was the right time to embark on an industrial park project despite naysayers who were questioning them about their decision.

“We never doubted our decision [to develop an industrial park] but we always look for a solution to problems. We always want to challenge ourselves, to step out of our comfort zone. We feel lucky to be at the right age and time to do this industrial park,” he says.

Serendipity at work

Having decided to develop an industrial park, Thomas and his team found that the Senawang land was best suited for one.

“This piece of land is well situated between many industrial parks and what industrial players need — water, electricity and gas,” says Thomas.

“In the east, we have the national grid line, which will provide ample electricity. In the west, we are adjacent to a river; so, we can extract the water from there and use it, which will be good for those [companies] that have high demand for water — for instance, data centres and glove manufacturers. In the north, there is the national gas line.”

Moreover, to help with energy needs, the park has its own solar power generation centre, which can provide energy to companies in case of a power failure. As for energy storage, Thomas says, “We are in discussion with two energy storage providers: One is traditional battery-type storage and the other is gravity battery, which is something new. When we have excess energy, that energy will lift up a heavy weight with a gear. When there is higher demand, the weight will slowly drop, moving a device and generating electricity.”

SPD Tech Valley will offer two types of factories — ready-built and built-to-suit. There will be 24 light industrial lots, 57 medium industrial lots — of which 33 lots will offer ready-built detached factories — and 21 heavy industrial lots.

SPD Tech Valley, which is expected to take 10 years to be completed, will be developed in phases. The first phase will cover an area of 285.25 acres and offer 13 medium industrial lots, 33 detached factories and 11 heavy industrial lots. The ready-built versions will be 33 detached factories and cater for medium industrial activities. There are three types — A, A1 and B — and they are selling from RM470 psf on the gross built-up.

Types A (eight units) and A1 (two units) have a minimum lot area of 1.3 acres, with the lot size measuring 72m (236ft) by 78m (256ft). The building measurement will be 52m (171ft) by 46m (151ft), with a gross built-up of 3,164 sq m (34,057 sq ft), and will comprise a 2-storey office and a 1-storey factory area. Type B (22 units) have a minimum lot area of 1.1 acres, with a lot size measuring 60m (197ft) by 78m (256ft). The building size is 40m (131 sq ft) by 46m (151 sq ft) with a gross built-up of 2,441m (26,274 sq ft). It will also have a 2-storey office component and a 1-storey factory area.

The ready-built factories will have solar panels installed, while the built-to-suit factories can lease their roofs to Seri Pajam to install the panels and manage it for them. 

The built-to-suit portions cater for medium and heavy industry players. There are 24 medium industry lots measuring between three and five acres, with the selling price from RM70 psf; the heavy industrial lots measure 2.5 to 14.2 acres with the selling price from RM80 psf.

The lots allocated for light industrial activity will involve SPD Tech Valley’s intelligent warehouse, which will not be sold but will be managed by the developer for recurring income.

Thomas says the intelligent warehouse will occupy 20.39 acres and act as extra storage space for customers that may not have enough space in their own warehouse and need a temporary storage facility.

“The intelligent warehouse will be equipped with a warehouse management system featuring automated picking tools and autonomous mobile robots,” Thomas says, adding that cameras will be able to estimate the capacity of the trucks coming in and out, and whether they are fully loaded, thus reducing manpower and costs.

The industrial park is individual-titled and, as such, owners/tenants must sign a Deed of Mutual Governance upon entering the park.

More holistic design

SPD Tech Valley also features other components such as a commercial hub, recreational park, training centre called Centre of Excellence, centralised labour quarters (CLQ) and business support and leisure centre. The last two components will be developed in Phase 1.

The business support and leisure centre will offer recreational facilities such as a swimming pool and gymnasium, as well as a restaurant and boutique hotel.

“We have the Centre of Excellence, a training centre where we will conduct vocational courses to upgrade the skills of workers,” Thomas says.

The CLQ will have 5,000 beds. “It is not just a bed for the workers; it is like a community for them. After work, the have a place to return to that has green spaces, a food court, retail area and prayer area, just like in a residential environment. We provide a free electric shuttle service within the park for workers to be ferried to their workplace, whoever subscribes to the CLQ,” says Thomas.

The commercial hub occupies 39.26 acres and will have 28 commercial lots and 84 shop offices. The commercial lots will house petrol and EV charging stations and a sales gallery. Thomas says some of the shopoffices will be put up for sale with a tentative selling price starting from RM1.2 million; the rest will be retained for recurring income.

“The shopoffices will accommodate a variety of businesses, catering for the everyday needs of the industry worker. Permitted operations will include laundromats, medical clinics, daycare, eateries and cafes, ensuring a comprehensive range of services and amenities are readily accessible to the community.”

In terms of security, artificial intelligence (AI) will be used in and around the park. There will be face and car plate recognition systems; perimeter fencing with AI cameras that can detect trespassers and inform the security personnel; smart visitor management system; and RFID sticker access. Cameras will be installed throughout the park to track any intruders. All this will reduce predictable patrol times as well as ensure action can be taken quickly.

There will also be a recreational park with a jogging track, outdoor gymnasium, multipurpose court, compose area and meditation zones. A rainwater harvesting system will be used for irrigation and solar-powered lights will be used to illuminate the park.

Future endeavours

Thomas hopes that SPD Tech Valley will be a benchmark for other industrial parks in the state, as there are currently no guidelines for such parks. He and his team are working closely with the state government to come up with guidelines.

He says, in terms of talent pool, the population in Negeri Sembilan, particularly Seremban, which is about one million, provides enough talent for the industrial park. “There is no workforce issue,” he says.

The SPD Tech Valley is only 15 minutes’ drive from Seremban town, and accessibility is provided from the Kajang-Seremban Highway (Lekas) and the North-South Highway. In terms of distance to major ports and airport, SPD Tech Valley will be 35km from Nilai Inland Port, 55km from the Kuala Lumpur International Airport, 80km to KLCC, 100km to Port Klang and 280km from Kuantan Port.  

Thomas says Seri Pajam wants to shift the company contribution from 100% residential and commercial to 50% residential and commercial and 50% industrial.

“We also want to venture into other states because, all this while, we have stayed in Negeri Sembilan. So, we are looking at other states, like Johor, Penang and Selangor,” he says, adding that the timeline for the expansion is five years.

The product type that the company would like to develop in other states will depend on the land and location. “We are also trying to diversify from the buy-land-develop-and-sell model; we are looking for recurring income,” he says.

At present, Seri Pajam has an undeveloped land bank of 800 acres, including the more than 500 acres of SPD Tech Valley land, which has a total gross development value of RM4.5 billion.

Source: The Edge Malaysia

Developing an ESG-compliant industrial park in Negeri Sembilan

US-based manufacturer of electrical and network infrastructure Panduit Corporation announced the opening of its new state-of-the-art manufacturing facility in Johor Bahru on Wednesday.

Spanning 25,083 square meters, the facility, which began operations in October 2023, manufactures cable tie products, according to a statement from Malaysian Investment Development Authority (Mida). The facility is expected to create 184 new jobs by the end of 2024, the agency said.

“The decision of building a new plant in Johor Bahru will help us remain competitive while maintaining our strategic presence in the area and ensuring ongoing service to our customers,” said Panduit senior vice-president and managing director for Asia-Pacific Harry Woo.

The new facility features advanced robotics and automation to maximise productivity, along with energy-efficient design practices to enhance efficiency and sustainability, said Panduit senior vice-president of operations David Tallentire.

Mida CEO Sikh Shamsul Ibrahim Sikh Abdul Majid said Panduit’s presence enhances Malaysia’s high-tech talent pool while aiding small and medium enterprises to adopt advanced manufacturing technologies and contribute to the development of the plastics industry ecosystem.

Panduit’s decision to establish operations in Johor underscores the state’s strategic advantages, including its location, infrastructure, talent pool, and role as an Asean market hub, said Johor State executive member and chairman of Investment, Trade, Consumer Affairs, and Human Resources Committee Lee Ting Han.

“We trust that this investment will further boost Malaysia and Johor’s reputation as the top investment destination for high technology and precision manufacturing industries,” Lee said.

Source: The Edge Malaysia

US firm Panduit unveils manufacturing facility in Johor Bahru

Sarawak’s Oil and Gas sector, bolstered by Carbon Capture, Utilisation and Storage (CCUS), is projected to surpass RM60 billion in gross domestic product (GDP) by 2030, says Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He highlighted that the state’s oil and gas sector has yielded significant achievements in recent years, RM10 billion last year from Petronas comprising of sales tax, dividends, and royalty.

“Sarawak has also kickstarted a promising CCUS industry,” he said in his winding-up speech during the State Legislative Assembly (DUN) sitting today.

Apart from that, he said Sarawak will have three landmark Carbon Capture and Storage (CCS) projects signed this year, namely the Kasawari-M1 project, the Lang Lebah-Golok project, and the storage of industrial CO2 emissions M3 project.

With that, he assured that the state government has developed the necessary legal and regulatory framework for the CCS sector to safeguard the rights and environmental safety of Sarawak.

“All companies wanting to develop and operate CCS in Sarawak must comply with our legal and regulatory framework, including the requirement of Environmental Impact Assessments (EIA),” he said.

He said according to the CCUS Market Global Opportunity Analysis and Industry Forecast 2023-2032, the global CCS market presents a compelling opportunity, with a projected Compound Annual Growth Rate of 13.3 per cent.

He said Sarawakian companies are uniquely positioned to capitalise on this nascent market as the region’s early movers and he hence urged them to develop their expertise in this field, establishing themselves as leaders in upcoming regional CCS projects.

“With our oil and gas, and CCUS industry activities accelerating, Sarawak Oil & Gas, Services and Equipment (OGSE) players play an important role in the success and attainment of this ambition.

“Malaysia’s OGSE sector is projected to reach RM40 billion to RM50 billion by 2030. By leveraging Sarawak’s growing oil and gas activity, local OGSE companies can partner and learn from industry leaders, propelling them to regional prominence and, ultimately, global success.

“We envision a future with Sarawak OGSE companies listed on the stock exchange, with substantial valuations comparable to international OGSE players,” he said.

Meanwhile, Abang Johari revealed that since March 2024, Petros has commenced engagements with Petronas, Upstream Gas Producers and Downstream Gas Buyers on the Distribution of Gas Ordinance (DGO) Amendment 2023, which states that Petros is the only party mandated to buy, distribute, and sell gas as the single buyer and single seller in Sarawak.

He said the appointment of Petros as state’s Gas Aggregator marked a significant step forward towards managing Sarawak’s gas resources to ensure availability of gas domestically for power generation as well as new and existing industries required to spur growth and development across the state.

“Petros and Petronas are working together to ensure a seamless transition for the Gas Aggregator role which we expect to be completed by the third quarter of 2024.

“The Gas Aggregator role will enable Petros to invest in gas infrastructure to accelerate the development of the four strategic hubs under the Sarawak Gas Roadmap which will attract more than RM100 billion of Foreign Direct Investment and Domestic Direct Investment opportunities,” he said.

Source: Borneo Post

Sarawak O&G projected to surpass RM60 bln in GDP by 2030, says Premier

The US plans to raise tariffs on a wide range of Chinese imports, including semiconductors, batteries, solar cells and critical minerals will benefit Malaysia further as multinational companies look to alternative investment destinations.

In particular, the tariff rate on semiconductor imports from China will double from 25% to 50% by 2025, targeting strategic sectors such as electric vehicles (EVs), batteries, semiconductors, solar cells, medical products, steel, aluminium, critical minerals, and ship-to-shore cranes.

“This move to increase levies on targeted China products will result in Chinese companies, which are already supplying to the United States, looking at putting orders through other companies in the South-East Asia region currently serving the United States market,” Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai told Starbiz.

He said Malaysia stood to benefit from the business diversion given the country’s stronghold in the semiconductor industry.

Malaysia has 13% of the global market for chip packaging, assembly and testing services, according to the Malaysian Investment Development Authority in a Feb 18 report.

It is the world’s sixth-largest exporter of semiconductors.

The semiconductor industry contributes to about 25% of Malaysia’s gross domestic product.

“For the United States, imports of these products from China will become more expensive and they will look for alternative suppliers to support the manufacturing of their products in order to be more competitive.

“Essentially, the higher tariffs imposed on China will open up opportunities for South-East Asian companies which are already supplying similar products to the United States,” he added.

Among the top gainers on Bursa Malaysia at 3.30pm yesterday were semiconductor counters including Unisem (M) Bhd, which rose 2.56% to RM4 and Aurelius Technologies Bhd which was up 1.97% to RM3.11. Meanwhile, Inari Amertron Bhd gained 1.29% to RM3.13 while Vitrox rose 1.21% to RM7.54.

Similarly, AmInvestment Bank Bhd (AmResearch) said in its report yesterday that there will be more intense trade diversions to Malaysia, especially Chinese players that have US customers.

It expected higher foreign direct investment (FDI) inflows to Malaysia for relocation and supply chain divergence.

According to RHB Research, there was an evident growth of FDI and spillover effect to local companies stemming from supply chain divergence and relocation.

“As companies around the world look for an alternative to China to mitigate geopolitical risks – a strategy dubbed as “China Plus One” has benefitted Malaysia given its robust semiconductor ecosystem, supportive infrastructure and wide array of talent pools.

“Chinese suppliers serving major US multinational corporations have also begun partnering with local Malaysian companies to establish plants in Malaysia to continue supplying their US-based customers,” the research house added.

RHB Research pointed out that the tariffs were initially imposed in 2019 on US$300bil worth of goods during the Donald Trump administration and this escalation was not entirely unexpected.

Since the onset of the US-China trade war five years ago, significant supply chain relocations and divergences have occurred, making the semiconductor supply chain more resilient in addressing such challenges.

It said this situation will also open doors for Malaysia-based companies, particularly in the automatic test equipment sub-segment, as Chinese companies shift away from US-based suppliers.

Three outsourced semiconductor assembly and test vendors – Inari Amertron, Malaysian Pacific Industries, and Unisem have exposures through their plants in Kunshan and Yiwu, Suzhou and Chengdu.

“However, we expect the impact to be minimal (if any) as their customers are mainly catering for the non-US market and various programme transfers have taken place since the trade war started five years ago.

“In fact, this development could accelerate and intensify the project and programme transfer or relocation, benefitting the companies in the mid-term,” RHB Research added.

Meanwhile, AmResearch believed that Vitrox Corp Bhd, Greatech Technology Bhd, Pentamaster Corp Bhd and TT Vision Holdings Bhd could be the beneficiaries being involved in the EV, solar, medical and semiconductor sectors.

“However, we expect some negative situation in the end-market which is likely to impact some of our local players.

“We believe end-products such as legacy chips, EV and solar panels could flood the market with oversupply as inventories eventually pile up.

“Hence, we are cautious on the oversupply of end-products that can cause a slower rate of replenishment in orders by Chinese customers,” it added.

The research house also expected intensified competition among Chinese players that could lead to years of market consolidation.

“This will also affect our local players that are tapping into the Chinese market as they face more challenges such as declining market share and prices.

“Overall, we are positive on this development given the increased sourcing of components from Malaysia and longer term FDI flows which will further upgrade the entire supply chain and ecosystem development in the country,” AmResearch added.

Source: The Star

United States tariff hike will benefit Malaysia

Sarawak recorded RM22.8 billion of approved investments in services, manufacturing and primary sectors last, Deputy Premier Datuk Awang Tengah Ali Hasan told the state legislative assembly today.

He said domestic direct investment (DDI) was the main contributor at 65.8 per cent or RM15 billion while foreign direct investment (FDI) contributed 34.2 per cent or RM7.8 billion of the total approved investments.

“These approved investments involved 339 projects, which potentially create 4,500 jobs,” Awang Tengah, who is also the state minister of international trade, industry and investment, said in his winding-up speech.

He said the manufacturing sector contributed the most at 40.3 per cent or RM9.2 billion of the total approved investments, followed by the services sector at 38.6 per cent or RM8.8 billion and the primary sector at 21.1 per cent or RM4.8 billion.

He said the manufacturing sector contributed 27.7 per cent to the state’s total Gross Domestic Products (GDP), creating 4,200 employment opportunities.

He said the approved investments in manufacturing were mainly in the electrical and electronics (E&E) sector that produces mainly semiconductors wafers, testing and probing (RM3.4 billion); basic metal (copper foil & building materials) (RM2.6 billion) and chemical products (fertiliser) (RM1.3 billion).

He said it is worth noting that nearly 50 per cent of the approved projects in 2023 have been materialised in various stages of development, including the were E&E, basic metal, chemical and food products projects.

He said for the first quarter of this year, the manufacturing sector recorded RM2.4 billion worth of investment for 30 projects.

He said these investments are expected to create more than 2,000 employment opportunities and were mainly in chemical products (urea and melamine) (RM1.7 billion), basic metal products (metallic silicon and molten aluminium) (RM436 million) and non-metallic mineral products (cement and concrete) (RM143 million).

The minister said Sarawak continues to attract new investment interests and expansion from both FDI and DDI, including the solar glass project and mining of silica sand worth RM6.5 billion; data centre worth RM18.6 billion; and expansion to manufacture components for batteries worth RM1 billion.

He said the manufacturing will shift to more advanced and technology-driven production, move up the value chain and diversify towards sustainable green growth in line with the Post-Covid-19 Development Strategy 2030.

Awang Tengah said his ministry will continue to improve the ease of doing business to attract quality investments, enhancing the position of Sarawak as a preferred investment destination.

He added that the state holds huge potential in the resource-based sector, stating that there is a need to further unlock the opportunities and potential of this sector for the participation of foreign and domestic investors.

“The Sarawak Gas Roadmap comprising four strategic hubs in Miri, Samalaju, Bintulu and Kuching is expected to attract more than RM100 billion worth of FDI and DDI over the next ten years.

“The investment in oil and gas sector will further accelerate the economic growth, create jobs and stimulate infrastructure development,” he said, adding that the state-owned oil company Petroleum Sarawak Berhad (Petros) is investing RM4 billion in Bintulu, Samalaju and Miri hubs in the next three years.

He said these include the RM100 million to deliver gas to Bintulu town by expanding the trunkline and gas network for the benefit of more than 28,000 households, as well as commercial and industrial customers.

He said Petros is also involved in the RM1 billion 65km long Samalaju Pipeline development project to transport natural gas from Bintulu to the Samalaju Industrial Park by 2025.

He said Petros is also involved in the development of the RM2.5 billion 500 megawatts (MW) Miri Combined Cycle Gas Turbine Power Plant which is expected to be commissioned by the fourth quarter of 2027.

He said Petros continues to be actively involved in upstream activities especially in rejuvenating onshore exploration and commercialisation, adding that as of now it is already participating in 18 Sarawak blocks.

Source: Malay Mail

Sarawak records RM22.8b in 2023 approved investments

Malaysian rubber glove manufacturers, which have suffered from lower average selling prices caused by intensive competition, may be able to export more to the US as its president Joe Biden raises the tariffs on Chinese rubber medical and surgical gloves from 7.5% to 25% in 2026, among others. 

With the tariff hike, Chinese gloves will be more expensive in about two years compared to now. 

While Malaysia has some of the world’s largest glovemakers, their pricing power has been diminishing due to competition from Chinese players who make cheaper gloves, hurting the margins of Malaysian glove manufacturers.

Consequently the Malaysian glove industry has been operating at a low utilisation rate below 50% due to an enduring oversupply of gloves, while the overall sales volume has declined year-on-year. In contrast, Chinese glove players are still running at near full capacity, according to a note by PublicInvest Research in February.

Based on the research firm’s channel checks, Chinese players are currently selling about US$2 (RM9.47) per 1,000 pieces cheaper than their Malaysian counterparts, pricing their products at US$16-US$18 per 1,000 pieces.

In September 2021, the US lifted a year-long ban imposed on imports from Top Glove Corp Bhd (KL:TOPGLOV) for alleged forced labour, after a thorough review of evidence that showed the company had addressed all indicators of forced labour. 

The US is a major export market for Top Glove, accounting for 17% of its sales volume. Pre-pandemic, the US accounted for around 25% of its total sales. 

Supermax Corp Bhd (KL:SUPERMX) was also hit with a similar import ban in the US in 2021 but was later lifted in 2023, following the “successful remediation of forced labour indicators”.

The US historically contributes around 20% to 30% of its earnings.

Supermax has set aside a budget of US$350 million (RM1.7 billion) for the first phase of its expansion to set up a plant in the US. Installation of machinery is expected to start this year when civil and structural works are completed.

Supermax’s US expansion is on the grounds that there would be increasing barriers to entry and higher import duties imposed in the future. Hence, domestic manufacturers would have an edge in the US against Chinese competitors. 

With the announcement on the tariff hikes on Chinese imports, the big investment by Supermax may well be worth it after all. 

Meanwhile, Hartalega Holdings Bhd (KL:HARTA) commands about 18% of the market share in the US for their nitrile glove industry, according to the Malaysia External Trade Development Corp (Matrade). The company exports 100% of its products internationally, including the Americas, Europe, the Asia-Pacific, Africa, and the Middle East.

Source: The Edge Malaysia

US tariff hike on Chinese products may augur well for Malaysian glovemakers

Swedish multinational engineering company Sandvik has launched its new production facility in Malaysia dedicated to manufacturing underground load and haul equipment.

Sandvik Mining and Rock Solutions president Mats Eriksson said the factory aims to support the assembly production of all Sandvik load and haul underground loaders and trucks, including battery electric vehicles (BEV), and establish a robust supplier network in the region.

“The Seremban facility is important to ensure flexible manufacturing of both conventional diesel and battery-electric loaders and trucks while adhering to Sandvik’s stringent standards for sustainability, quality, and safety.

“Sandvik’s commitment to delivering maximum value in sustainability, performances, quality, safety, flexibility and total economy is evident in this endeavour,” he said during the Sandvik Seremban Grand Launch ceremony here today.

The launch ceremony was officiated by Negeri Sembilan Menteri Besar Datuk Seri Aminuddin Harun.

Eriksson said that with an initial investment value of RM150 million, the factory would create potential job opportunities for the local community.

He added that the machines assembled in Malaysia at the new factory would be the Toro LH517 loader, with production expected to ramp up over the coming year, while the Toro TH545 trucks would commence production later in the year as part of a crossmanufacturing plan.

“Battery product manufacturing is slated to begin by the third quarter of this year, with the BEV unit assembly scheduled for 2025 aligning with future electrification goals,” he said.

Meanwhile, Aminuddin said the launch of the Seremban factory underscored Sandvik’s commitment to a new assembly production facility, indicating a major advancement in the underground mining equipment sector.

“I would like to express my gratitude to Sandvik for choosing Negeri Sembilan as the first site of its kind in Malaysia and I hope Sandvik may contribute to the creation of skilled workforce in this state,” he said.

The new factory, spanning over 8,000 square metres, is located in the Sendayan Techvalley Industrial Park and comprises 15 versatile assembly cells.

Sandvik Mining and Rock Solution, a business area within the Sandvik Group, is a leading global supplier of equipment and tools, parts, services, digital solutions and sustainability-driven technologies for the mining and construction industries.

Source: Bernama

Sandvik launches new load and haul factory in Malaysia