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Govt to boost chips export logistics

Govt to boost chips export logistics

26 Jun 2024

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: The Star