Initiative to move up value chain will put Malaysia at forefront of semicon industry: Tengku Zafrul - MIDA | Malaysian Investment Development Authority
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Initiative to move up value chain will put Malaysia at forefront of semicon industry: Tengku Zafrul

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

26 Jun 2024

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Bernama