Taiwanese storage giant to relook at Malaysia as IC design hub - MIDA | Malaysian Investment Development Authority
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Taiwanese storage giant to relook at Malaysia as IC design hub

Taiwanese storage giant to relook at Malaysia as IC design hub

01 May 2023

If successful, this can be a primary economic growth engine for the country

TAIWAN-BASED electronics storage manufacturing giant Phison Electronics Corp eyes on re-establishing an integrated circuit (IC) design hub in Malaysia after a failed attempt in 2019, its top executive told The Malaysian Reserve (TMR) in an interview.

In 2012, Phison announced investing up to US$3 million (RM13.38 million) to set up an IC design research and development (R&D) centre in Penang, only to cease operation in 2019 due to several factors, including talent loss, work culture and lack of local businesses.

The original plan in 2012 was to establish a Phison branch in Malaysia and eventually turn it into a hub, but it was unsuccessful.

Malaysian-born Phison CEO and co-founder Datuk Pua Khein Seng said this time around, the plan is to establish an IC design start-up, focusing on enterprise solid-state drive (SSD) and R&D.

Speaking to TMR during his recent visit to Kuala Lumpur, Pua said Malaysia could be developed as a storage IC design hub, a primary economic growth engine.

While Pua declined to divulge the investment needed for the start-up, he said Phison invests US$350 million yearly for R&D initiatives.

He said Malaysia had been a part of the semiconductor supply chain. Still, only a few locally manufactured critical components exist, and the government and businesses rely heavily on imports to sustain their value chains.

Pua said Phison realised a high demand for SSD controllers for enterprises in Malaysia, particularly in the public sector, to handle the necessary data storage centres.

“The government and companies use many enterprises or clients’ SSDs for their servers and computers but it has nothing to do with Malaysia…there is no local market and all the products are imported,” he said.

IC design refers to the process of designing the integrated circuits that are used in NAND flash memory, which is a type of non-volatile storage that is commonly used in devices like USB drives, memory cards and SSDs.

“While the government is already spending the money, unfortunately it’s not helping to build the R&D and infrastructure of our own,” he said.

Pua added that talent shortage remains a crucial issue in the IC design sector as it requires expertise, intensive technology, competent engineers and scientists, tech support and an encouraging intellectual property (IP) environment.

“Talent sustainability has always been an issue in the tech industry, and young engineers tend to move to another country like Singapore for higher pay once they are capable and improved after a few years,” he said.

For the proposed IC design start-up, Phua said Phison would invest in training new talents and engineers to become skilled IC designers.

“For the first stage, the plan is we do an open interview, and hire between 50 and 80 graduates from big local public universities, with a related background in engineering, IT or computer programming language for intensive training.

“After three months, we will have an exam and polish them to be industry ready, build a project with the hope they will stay,” he added.

Meanwhile, Phison also intends to invite industry players to participate as local partners in the proposed tech start-up.

Phison was established by five founders (including Phua) in late 2000 in Taiwan.

The company shot to prominence when it claimed to have launched the world’s first single-chip USB flash drive IC (popularly known as pendrive). Since its inception, it has evolved from the consumer-driven USB business into a leading NAND storage solution for electronic devices, cloud servers and electric vehicles.

According to its company profile, Phison is currently a global market leader in NAND flash controllers and applications, including USB, secure digital (SD), embedded MultiMediaCard (eMMC) and universal flash storage (UFS).

The company has shipped over 600 million controllers worldwide yearly and recorded sales of over US$2.4 billion in 2022.

Phison employs more than 3,800 people globally, including some 120 Malaysians.

The company’s primary sales markets include North America, South America, Europe, Africa, Australia, Russia, Japan, Korea, India, China and Taiwan.

Source: The Malaysian Reserve