Malaysia set to gain from digital economy - MIDA | Malaysian Investment Development Authority
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Malaysia set to gain from digital economy

Malaysia set to gain from digital economy

25 Jan 2023

Malaysia has the potential to lead regionally in the field of the digital economy, says Exyte GmbH chief executive officer Dr Wolfgang Buchele.

Exyte, a leader in the design and construction of high-tech facilities for a wide range of industries including semiconductor and data storage, is currently undertaking €2.4bil (RM11.1bil) worth of projects in South-East Asia.

“Several factors favour the development of the digital sector in Malaysia. The country’s Fourth Industrial Revolution blueprint has been executed and will benefit and hasten the digitalisation process progress.

“The data centres in the country have expanded rapidly in tandem with increased Internet usage.

“The government’s ability to provide low electricity tariffs, reliable water supply and tax incentives also favours the digital sector,” Buchele said in an interview.

Buchele added that Malaysia had taken a step in the right direction to reap the digital economy’s opportunities.

He said the pandemic has made digitalisation a necessity to increase productivity. By 2025, some 75 billion Internet of Things (IoT)-connected devices will be in use globally – a nearly three-fold increase from the IoT-installed base in 2019.

“Semiconductors are the essential parts of all these devices. And the data these devices generate must be processed and stored.

“The volume of digital data generated annually worldwide is expected to increase from 64.2 zettabytes in 2020 to 181 zettabytes by 2025.

“The market for data centre infrastructure is poised to double between 2020 and 2027, from US$50bil (RM232.6bil) to US$100bil (RM465.3bil),” he added.

According to Buchele, Malaysian companies could support the manufacturing supply chain of materials used in producing electric vehicles (EVs).

Global battery production capacity is expected to reach 6,000 GWh in 2030, equivalent to 109 million EVs.

Malaysian companies can benefit from this development, as the country produces materials related to EV battery manufacturing and has reputable local companies equipped with factory automation lines for battery cells and battery pack production.

“If the local companies take up this challenge, the country will be able to attract investments from EV car manufacturers. Battery cells are usually produced where they are installed in vehicles.

“In Germany, where we are headquartered, we are currently setting up the first battery-cell production for a Chinese manufacturer outside China.

“We are in talks with the vehicle and cell manufacturers as well as startups to implement further projects,” he said.

On its plans in Malaysia, he said Exyte is building the first high-end integrated circuit (IC) substrates manufacturing facility in Kulim, Kedah, for Austrian company AT&S, a renowned manufacturer of circuit boards and IC substrates.

The plant, scheduled to start operations in 2024, is the first of its kind in South-East Asia, said Buchele.

In the first 10 months of 2022, sales in South-East Asia quadrupled to €2.4bil (RM11.3bil), he added.

According to him, Malaysia continues to drive the group’s business expansion plans.

“We expect this to continue in the short to medium term as our key customers increase their investments and production capacities in Malaysia.”

He said this is an exciting time for the country as the semiconductor industry is looking to grow at a faster rate over the next couple of years as compared to the last two to three decades.

“Due to the rising order intake in South-East Asia and Malaysia, we are expanding our workforce here,” he said.

Source: The Star