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Boost for E and E exports

Boost for E and E exports

11 May 2023

The country’s electrical and electronic (E&E) exports are performing better than this year’s global outlook, says the Malaysia Semiconductor Industry Association (MSIA).

Its president Datuk Seri Wong Siew Hai said E&E exports for the first quarter of this year was RM142bil, which was 3.3% higher compared to the same corresponding period last year.

However, he said that the figure was 8.4% lower compared to the fourth quarter of last year.

Wong said Malaysia’s E&E exports recorded a strong growth of 18% and 30% in 2021 and 2022 respectively with E&E exports reaching a record high of RM593bil in 2022 alone.

However, according to the international research house Gartner, Wong said they had forecast a decline in worldwide semiconductor revenue of 11% this year.

“But so far, Malaysia’s exports seem to be performing better than the global scene,” he added.

On the shortage of foreign workers, Wong said most companies had already hired the workers they needed last year as demand for chips was strong then.

“The situation is different now, as the E&E industry is facing a contraction in demand from the consumer market.

“With the improvement in lead time for shipment of chips and companies undergoing austerity drive, there is no real need for foreign workers in the short-term.

“However, the policy on foreign workers, expatriates and workforce in general still needs to be addressed and the processes further improved,” Wong said.

Small and Medium Enterprises Association (Samenta) national secretary Yeoh Seng Hooi said the outlook of the SME industry that supported semi-conductor sectors had not been favourable as there were too many uncertainties in the global market.

“The hike in interest rates has raised financing costs and there is fear that it may impact consumption. This doesn’t augur well for SMEs that are still recovering from the Covid-19 pandemic,” he said.

Yeoh said the SME industry could also go full speed in production but it would be based on demand.

On exports from the industry, he said it was dependent on external demand which appears to be softening.

He, however, said those in the automotive, medical (except gloves), metal stamping, wood-based still recorded some growth.

“The Vistage-MIER CEO Confidence Index has shown that 52% of the respondents are expecting an increase in export orders,” he said, adding that the prospects for the second half remain a concern for SMEs.

On foreign worker recruitments , the process is ongoing and the situation has seen some improvement.

He said the costs of recruitment, including agency fees, were still taxing to SMEs.

He said SMEs would like to see the issuance of work permits to foreign students who are already studying in local tertiary institutions.

“With the shortage of skilled workers and technicians, more approvals to recruit skilled workers from India, the Philippines and others should be granted during this transitionary phase until we have sufficient graduates from the technical and vocational education and training (TVET) streams,” he said.

Source: The Star