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Malaysia welcomes investments in semiconductor value chain

Malaysia welcomes investments in semiconductor value chain

06 Nov 2023

Malaysia, which holds an important position in the global chip-making supply chain, embraces investments in both the backend and frontend of the semiconductor value chain, said Deputy Minister of Investment, Trade and Industry Liew Chin Tong.

He said the backend manufacturing of semiconductors is crucial because advanced packaging is becoming an increasingly complex industry, and Malaysia’s participation in the global supply chain is dependent on it.

“Microchips have the potential to generate far greater value addition, with a stronger multiplier effect, through a boost in productivity and innovation, which is why semiconductors and the electrical and electronics (E&E) sector are an important focus area under the New Industrial Master Plan 2030 (NIMP 2030),” he said in his opening speech at the National E&E Forum 2023 organised by the Malaysian Semiconductor Industry Association (MSIA) here on Monday.

Liew emphasised that Malaysia’s semiconductor industry holds a 7% share of the global market and contributes 23% of the United States’ (US) semiconductor trade.

“It is a fact that is not widely acknowledged in the US, although I did hear it myself from US Secretary of Commerce Gina Raimando when I visited Detroit in May, that when factories in Malaysia were shut down during the Covid-19 lockdowns, the automotive industry in Detroit had to cease operating too,” he added.

Malaysia accounts for 13% of global backend semiconductor output and excels in chip assembly, packaging and testing, as well as electronics manufacturing services.

Meanwhile, speaking on the equipment, fab capacity and semiconductors in Southeast Asia, SEMI market intelligence team senior director Clark Tseng said the region could attract more foreign direct investments.

“Southeast Asia needs to be certain of the type of investments we want to attract. I see a lot of opportunities in equipment materials, foundry and others,” he said.

He added that semiconductor sales growth would be in the double digits for the next two years, as several applications, including artificial intelligence, automotive, high-performance computing, and edge computing, would drive the sector.

Source: Bernama