KUALA LUMPUR (Oct 12): Shortage of skilled talent and lack of research and development (R&D) are among the challenges faced by the electrical and electronics (E&E) industry in maintaining its growth and competitiveness globally.
These issues must be addressed if the government intends to become serious about moving Malaysia up the value chain, said Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed.
“The E&E industry plays a critical role in the country's industrial development. Indeed, Malaysia is a major global manufacturing hub for the E&E industry. We produce about 13% of the global back-end semiconductor output.
“E&E accounts for 40% of Malaysian exports. In the first eight months of 2021, Malaysia’s total trade in E&E products amounted to RM477 billion. Exports rose 18.8% to RM282 billion. As we all know, the E&E sector represents about 35% of Malaysia’s total exports.
“For the past 50 years, we have been successful in creating a comprehensive E&E ecosystem, particularly for front-end to back-end semiconductor manufacturing activities. A large number of multinational companies (MNCs) have established their operations here. More and more Malaysian companies have been part-and-parcel of the industry, providing products and services required by MNCs. Our domestic companies serve clients in the automotive, consumer, power management, and medical device segments,” said Mustapa in his opening remarks at the RMK12 webinar titled ‘Boosting E&E Industry in Moving up the Value Chain’ on Thursday.
Mustapa added that the Covid-19 pandemic has caused disruption to the global supply chain and the country’s economy, and the lockdown measures put in place by countries around the world created supply bottlenecks and challenges.
“During the course of the pandemic, many of you here today have been very vocal and submitted a lot of complaints to the government, especially about our SOPs [standard operating procedures]. We have worked very hard to deal with your issues and [I] am glad that they are all behind us now, Insha Allah. The global economy and our domestic economy are showing signs of recovery. The outlook in the medium term for this sector is bright,” he said.
Under the 12th Malaysia Plan (12MP), the E&E industry is targeted to contribute RM120 billion to gross domestic product (GDP) and generate RM495 billion in export earnings by 2025.
Going forward, Mustapa said, the government wants to work closely with the Ministry of International Trade and Industry Malaysia (MITI), Malaysian Investment Development Authority (MIDA), and the industry in order to realize its ambitious E&E targets in the 12MP.
“We are committed to creating a more conducive environment for the continued growth of the E&E sector. We want more and more Malaysian companies, especially SMEs [small and medium enterprises] to be part of the global value chain.
“Already, a number of our SMEs have made a name for themselves in the global E&E sector. For example, SkyeChip has designed cutting-edge Silicon IPs and integrated circuit (IC) products for the global market. SkyeChip has become the first Malaysian IC (Integrated Circuit) company to be widely accepted for 7nm (nanometers) production. Its products are on par with some of the world’s leading semiconductor companies — including Broadcom, AMD, and Xilinx. We are proud to note that SkyeChip’s team of 80 IC design engineers are overwhelmingly Malaysian. The company has also filed 10 patent applications in Malaysia, the United States, and China,” he added.