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MSIA: Malaysia has what it takes to become global automation hub

MSIA: Malaysia has what it takes to become global automation hub

27 Jul 2022

Malaysia needs to build itself as a global automation hub for the electrical and electronics (E&E) industry due to the country’s strength in automation, and to support the local semiconductor and the electronic manufacturing services (EMS) industries, said Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai.

“We need to establish Malaysia as a global automation hub because we are very strong in automation, and to support the semiconductor and the EMS industries. The whole electronics industry (is) really strong,” he said in his speech at the launch of the Nomura Global Shariah Semiconductor Equity Fund today.

Wong pointed out that what Malaysia is lacking is “branding” or global presence. He said it will take time to carry that out but the objective is to establish the country as the most capable or competitive automation hub.

Additionally he said, it is important to source locally, which will create a waterfall effect. Wong cited Inari Amerton Bhd, which he said is one of the companies that do so for their manufacturing plants. Companies that source locally not only support their local vendors, but also create exposure for their vendors to other companies. This promotes growth and exposure to global markets for local companies.

“We’d like to grow more global champions. We don’t want them to just focus on Malaysia because the Malaysian market is small, we have to go out and compete in the global arena,” he remarked.

Wong said Malaysia should double-down on sectors with proven success and competitiveness, such as outsourced semiconductor assembly and testing, smart high-tech and high-value manufacturing, state-of-the-art technology, semiconductor, EMS, storage, industrial and automotive electronics, and medical devices.

Despite the strong demand for automotive semiconductors, the industry is facing a severe shortage due to new car designs that incorporate a larger number of chips and sensors, he added.

On his outlook for the industry, Wong said most segments in the semiconductor industry are “still very strong” but noted that there are headwinds such as inflation, recession, concerns on whether global gross domestic product will take a downturn that will affect the industry. However, the global semiconductor industry is expected to grow 7.1% in the next five years.

In 2021, he said, the electrical and electronics industry, which made up 37% of total exports, contributed RM456 billion to the local economy. It increased by 18.13% from RM386 billion recorded in 2020.

Earlier, Nomura Asset Management Malaysia Sdn Bhd, a Malaysian fund management unit of Nomura Holdings Inc, launched the Nomura Global Shariah Semiconductor Equity Fund to offer investors access to the rapidly growing semiconductor sector driven by global digitalisation trends. It is now available for a minimum initial investment of RM1,000 or US$1,000 (RM4,460).

The fund focuses on quality companies with high growth potential, healthy profit margins and strong intellectual property, pricing power and balance sheets. Its strategy is backed by in-depth fundamental analysis identifying quality names with distinct competitive advantages, solid governance, stable cash returns to shareholders, and a consistent track record of attractive returns on capital.

Source: The Sun Daily

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