Malaysia to increase efforts to address semiconductor backlog orders
08 Sep 2021
Malaysia is doing its best to reduce the backlog of orders in the semiconductor industry due to the disruption of operations in the past 12 months, following the imposition of lockdowns to curb the Covid-19 pandemic.
The lockdowns saw many factories in Malaysia and other countries suspending their operations or operating in limited capacities.
The shortages – mainly involving integrated circuits (ICs) components – were also compounded by developments around the world over time that had restricted supply flows.
This includes fire and drought incidents involving fabrication factories in Japan, the US and Taiwan, as well as the Suez Canal incident in March this year when container ship Ever Given was horizontally wedged and obstructed the traffic flow at one of the busiest trade routes in the world for almost a week.
Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said as Malaysia plays a significant role in the global semiconductor supply chain, it is critical to expand the sector’s capacity in light of the severe global shortage of ICs.
He noted that the government has allowed factories to resume operations at 100% capacity after 80% of the employees have been fully vaccinated, which helped to ease some of the pressure in meeting customers’ orders.
According to the survey, 16 companies said they would invest over RM4 billion in capital expenditure over the next two years, expand their built-up area by 3.4 million sq ft, and create about 4,600 new jobs.
Meanwhile, industry research revealed that global demand for ICs is projected to increase by 20% this year and a further 10% in 2022.
Malaysia is one of the top 10 countries in the semiconductor industry, accounting for about 7% of the global semiconductor trade and about 13% of the global capacity in terms of back-end assembly test and packaging.