The semiconductor industry in Malaysia is an important factor leading economic growth of the country and is expected to grow throughout 2016 to 2019. However, in order to transition itself into the next stage of development its industrial base has to be able to produce high-value products, which can be achieved through innovation, research and development and improved productivity of precision engineering companies and workers.
The signing of the ASEAN Economic Community (AEC) in 2015 and the Trans-Pacific Partnership in 2016 demonstrates the changes to its economic policies, which will help it stay relevant and competitive internationally.
The growth of the semiconductor industry in Malaysia is to meet the demand for mobile devices, computer storage, embedded technology and optoelectronics. Semiconductor products are the main export of the E&E industry.
There are four main sub-categories of E&E in Malaysia:
1. Consumer Electronics.
Includes A/V products. LED television receivers, digital home theatre systems, game consoles and digital cameras. Japanese and Korean companies are strongly represented and contribute greatly to growth and R&D activities.
2. Electronic Components.
Passive components, semiconductor devices, printed circuits, media, semiconductor equipment, substrates and connectors. Largest sub-category, totalling RM5.8bn in investments.
3. Industrial Electronics.
Multimedia and information technology including computers, telecommunication and office equipment. The second largest sub-category, making up 28% of total investments in E&E in 2014.
4. Electrical Appliances.
Includes lighting, air-conditioners, refrigerators, solar panels, vacuum cleaners, washing machines.
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Semiconductor Industry Malaysia largest sector in manufacturing industry.
Malaysia is a major Electronics and Electrical (E&E) manufacturer and is host to international semiconductor companies including AMD, Freescale Semiconductor, ASE, Infineon, STMicroelectronics, Intel, Fairchild Semiconductor, Renesas, X-FAB and Texas Instruments. Local companies include Unisem and Inari.
Today, there are more than 50 semiconductor companies in Malaysia, with most being Multinationals Companies (MNCs) and the Electronics and Electrical (E&E) industry is expected to grow at a compound annual rate of 15 percent from 2016 to 2019. In 2015 the semiconductor industry in Malaysia grew 6.1% despite global economic slowdown.
Foreign investments in the E&E industry make up about 85% of the total investments of RM182bn, which employs about 780,000 jobs. About 30 to 40% of those employed in the industry are engineers and managers.
Continued growth is expected to create another 157,000 new jobs by 2020, supported by a gross national income (GNI) of RM53.4 billion. In 2013, semiconductor exports made up 41.2% (RM97.8bn) of the total E&E exports. In 2014, E&E contributed 33.4% to total exports and 23.7% of total employment.
However, the industry is vulnerable to changes in the international market. For example, the slowdown in manufacturing in China, Malaysia’s largest semiconductor trading partner, has affected the country’s semiconductor exports.
One of the challenges of the sector is raising productivity. Several national plans and business models have been implemented to achieve those goals. Under the 11th Malaysia Plan (11MP) the government has put two strategies in place; increased automation and the reskilling/enhancing the skills of the workforce.
Increased productivity in all economic areas including the semiconductor industry in Malaysia is key to exponential growth of the economy, which will raise income levels, standard of living and create more job opportunities.
UPE Alliance is poised to grow with the Semiconductor Industry in Malaysia – Contact us at +607-863 0000 or email email@example.com for the best Precision Engineering Services in Malaysia.