Regional alliance drives semiconductor growth

 

(From left) EY Shanghai partner Derick Yap, InvestPenang chief executive officer Datuk Loo Lee Lian, Wang, Zairil, Wong, IBM Malaysia general manager Dickson Woo and Shanghai Fengmi Cloud Media Technology Co Ltd chairman Steven Huang launching 2024 Asia-Pacific Semiconductor Summit and Expo in Penang.

STRONG regional partnerships can drive growth, innovation and advancements in the semiconductor sector.

By leveraging each other’s expertise and ecosystems, stakeholders will be better positioned to stay at the forefront of this rapidly evolving industry.

Penang infrastructure, transport and digital committee chairman Zairil Khir Johari said this while launching 2024 Asia-Pacific Semiconductor Summit and Expo (APSSE) in Penang.

The recent two-day event held at Setia SPICE Convention Centre in Bayan Lepas, Penang, brought together over 30 exhibitors and 600 delegates from nine countries.

It was organised by Malaysia Semiconductor Industry Association (MSIA) and Penang government, in partnership with Shanghai Fengmi Cloud Media Technology Co Ltd.

Zairil said the semiconductor industry was the backbone of the modern economy, powering everything from smartphones to electric vehicles and machinery.

“There is almost nothing today that doesn’t have a chip in it.

“And with changes brought on by the 4th Industrial Revolution, potential applications would only continue to expand.”

He said the global semiconductor industry was valued at US$544bil (RM2.36tril) in 2023, and this was projected to exceed US$1tril (RM4.34tril) by 2030.

“There are opportunities for everyone, which makes events like APSSE 2024 a good platform for industry players and government to exchange ideas and explore collaborations,” Zairil said in his opening address.

He highlighted the long-standing and successful collaborations between Malaysian and Chinese firms as proof that such regional partnerships could be mutually beneficial.

“Indeed, 2024 marked the 50th anniversary of bilateral diplomatic relations between the two countries.

Zairil (front, centre), Wong (second from right) and other delegates observing a virtual reality application by one of the exhibitors.

“Around half of APSSE 2024’s exhibitors are from China.

“Together, we can drive innovation, enhance global supply chain resilience and shape the future of the semiconductor landscape.

“Malaysia is committed to deepening economic ties with China, especially in advancing technologies such as semiconductors, electric vehicles and green energy,” he added.

Zairil also praised various stakeholders for keeping the industry resilient in spite of various challenges in recent years, such as the pandemic and global geopolitical tensions.

“We have long been a key player in the semiconductor value chain, contributing approximately 13% of global assembly, testing and packaging. Of that number, almost half comes from Penang,” he said.

From 2019 to 2023, Zairil revealed that Penang attracted RM170bil of foreign direct investments, which was more than double the preceding decade.

“This showed how much growth was achieved in the last five years.

“We have become a trusted partner of many leading global firms,” he added before touring exhibitor booths in the arena.

MSIA president Datuk Seri Wong Siew Hai said the semiconductor industry was a cornerstone of the local economy, contributing over 40% of total exports in the electronics sector.

“With over 50 years of experience in the industry, a strategic location, strong ecosystem, cost-competitiveness, skilled talent and business-friendly government, we have been able to attract billions of ringgit in investments from tech giants across the world.

“But competition is intense and we must keep pace.

“Government initiatives like the National Semiconductor Strategy (NSS) and New Industrial Master Plan (NIMP) 2030 will allow us to move the industry into higher value areas.

“MSIA recently launched the Advanced Technology Equipment Cluster (ATEC) to consolidate expertise to meet ever changing demands and keep us as a market leader,” said Wong.

He noted that APSSE 2024 was the first time many of the participating Chinese firms had exhibited outside their country.

He said most people took it for granted, but everything they use had semiconductor components of varying complexities inside.

“Mobile phones and smart TVs are the most obvious examples. Other things like your air-conditioner remote, ceiling fans, water heater and even the thermal flask you use to make a cup of coffee, need such components to operate.

“An electric vehicle has over 3,000 semiconductors.

“It’s a key component of green energy. If you live in a rural area without running power, the solar panels that allow you to power things also need semiconductors.

“Go to any hospital and all the medical devices used to test you have lots of semiconductors inside.

“Global e-commerce would not be possible either without these tiny chips.

“The only difference is that we’re constantly coming up with newer materials that allow each piece to perform more functions at a lower cost,” Wong added.

ACM Research (Shanghai) Inc chairman Dr David Wang Hui said such globalisation would continue to be a fundamental driving force for the industry.

“Many Chinese companies are interested in coming to Malaysia.

“This would not only bring investment and create local jobs, but also drive innovation, technology, product quality and better manufacturing systems,” he added.

The APSSE event featured a series of panel talks, with topics on “Global Semiconductor Outlook”, “Transitioning from Local to International Outbound Investments”, “Artificial Intelligence”, “Asia-Pacific Semiconductor Strategies”, “Advancing ESG Through Innovations”, “Intellectual Property”, “Advanced Packaging” and “Strategies for STEM Talent Development”.

Business matching sessions and tours of several industrial sites were also held.

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On track with Penang LRT construction from December

Exciting new journey: An artist’s impression of the Penang LRT’s Mutiara Line. — File pic

Penang's Long-Awaited LRT Project Set To Break Ground ...

GEORGE TOWN: Penang’s Light Rail Transport (LRT) dream will begin to take shape in December with a groundbreaking event, with the first station to be built in Lebuh Macallum.

Transport Minister Anthony Loke is said to have approved a date to get the 29km Mutiara Line landmark project off the ground.

The alignment starts from Penang Sentral on the mainland before crossing the channel to Lebuh Macallum.

From there, the multibillion-ringgit line will pass through Komtar, Bandar Sri Pinang, Sungai Pinang, East Jelutong, The Light, Gelugor, Jalan Universiti, Sungai Dua, Sungai Nibong, Bukit Jambul, SPICE, Jalan Tengah, the Free Industrial Zone, Free Industrial Zone South, Sungai Tiram, the Penang International Airport, Permatang Damar Laut and Silicon Island, which will serve as a depot.

A component of the Penang Transport Master Plan, the Penang LRT will have 20 stations, including two interchange stations at Komtar and Penang Sentral in Butterworth, with completion slated for 2030.

It was reported recently that project developer Mass Rapid Transit Corp Sdn Bhd (MRT Corp) might opt for a rubber-tyred metro system to save on operations and maintenance costs.

With annual ridership projected at between five million and 42 million passengers, the Penang government is counting on the mammoth project to ease chronic traffic congestion in the state.

The Gamuda-led group SRS Consortium is currently finalising terms and conditions for the civil works package, which will cost about RM7.6bil.

Gamuda is planning to bid for the electrification and signalling works, worth about RM1.2bil.

The project has three main components: civil construction works for Segment 1, covering the alignment of Silicon Island to Komtar; Segment 2, which covers the line from Komtar to Penang Sentral, and a turnkey contract for system and carriage (coach) works.

Small and Medium Enterprises Association honorary national secretary Yeoh Seng Hooi said the LRT project would also provide more jobs, with skilled locals to benefit.

“The spillover effects will benefit subcontractors and those providing goods and services for the project.

“Infrastructure development, which reduces transport costs and travel time, will boost foreign and domestic investments,” he said.Transport analyst Abi Sofian Abdul Hamid said incorporating support networks like shuttle services and parking facilities would ensure the LRT system’s efficacy.

He said transit-oriented “last-mile” development around LRT stations would contribute to green transportation and lower carbon emissions.

In June, Loke said he hoped that physical work could commence before the year’s end.

He also revealed that the LRT’s alignment had been finalised.

He said this was done after discussions with all parties and that the Penang government agreed with the alignment proposed by MRT Corp, with the passenger station starting from Bayan Lepas to Komtar and one line to Penang Sentral.

On March 29, Loke announced that the Federal Government had taken over the Penang LRT project from the state government, with MRT Corp appointed as developer and asset owner.

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Winds of change in Penang DAP

Steven Sim Chee Keong 沈志强

 Sim succeeds Chow as state party chairman after polls at ordinary convention

GEORGE TOWN: A wind heralding change has blown through the halls of power in Penang.

The collective force of the 1,500-odd delegates of Penang DAP who cast their votes yesterday indicated a shift away from the powerful “Lim family” in the party.

Not all candidates known to be aligned with party chairman Lim Guan Eng scored enough votes to win a coveted seat in the state party committee – a sign that there are complex workings in the party that outsiders cannot measure.

Human Resources Minister Steven Sim became the new Penang DAP chairman from now until 2027 after scoring the second highest number of votes from state party delegates (1,237 votes).

Sim was asked to comment on the fact that assuming the post meant he could be the chief minister designate.

The Bukit Mertajam MP picked the middle ground: “We focus on the working on the ground first, make sure we win the next election and establish the government together.

“All that can be discussed later; we focus on working on the ground. Thank you,” he told the media in a minute-long press conference.

Penang DAP had its ordinary convention yesterday, requiring 1,500-odd delegates to vote in 15 out of 31 nominees to be in the state liaison committee.

After their votes were tallied and the 15 members were determined, the 15 then enter closed doors to thrash out who would be the chairman, deputy, secretary, treasurer and other office-bearers.

When the doors were opened, reporters got the news they had expected: Sim would take over from Penang Chief Minister Chow Kon Yeow as the new chairman.

Sim’s deputy is now Ramkarpal Singh, a son of the late party stalwart Datuk Seri Karpal Singh, who actually gained the most number of votes from Penang DAP delegates (1,247 votes).

Guan Eng’s sister Hui Ying, who is Deputy Finance Minister and Tanjong MP, retained her post as Penang DAP secretary. But she only garnered 827 votes.

Komtar assemblyman Teh Lai Heng, who used to be Chow’s political secretary, climbed up and became state party treasurer.The combination of Sim and Hui Ying as the chairman and secretary had earlier received open endorsement from DAP secretary-general Anthony Loke.

Among biggest casualties were Deputy Chief Minister II Jagdeep Singh Deo and state Tourism and Creative Economy Committee chairman Wong Hon Wai.

Other state assemblymen who did not make the cut were Heng Lee Lee (Berapit), Joseph Ng (Air Itam), K. Kumaran (Bagan Dalam) and Ong Ah Teong (Batu Lanchang).

These were among personalities believed to be attentive to Guan Eng’s opinions.

Guan Eng, who was Penang chief minister from 2008 to 2018, had never been the Penang DAP chairman. But a convention exists in that the “chief minister designate” is usually the chairman of the leading party in a given state.

State exco member Zairil Khir Johari (fourth, 1,166 votes) and Datuk Yeoh Soon Hin (third, 1,225), a former state exco member, were appointed as the state party vice-chairmen.

State party assistant secretary post went to H’ng Mooi Lye, the Penang local government executive councillor.

The assistant treasurer post will be held by Lay Hock Peng.

The organising secretary is now Phee Boon Chee, the younger brother of Penang DAP veteran Datuk Seri Phee Boon Poh, while the assistant organising secretary post will be held by both Lee Wei Seang and Lim Siew Khim.

The state DAP publicity secretary is now Joshua Woo and the assistant publicity secretary is Datuk Soon Lip Chee.

The director of political education is Daniel Gooi, who is the Penang state exco member for youth, sports and health.

The six committee members are Datuk Seri S. Sundarajoo, RSN Rayer, Phee Syn Tze, Ooi Yong Woi, Teh Chuann Yien and Foo Yu Keong

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Penang DAP delegates send signal to Lim family

Big demand for childcare

 

Sim Daycare, Jalan Sungai Dua, 11700 Penang

SIM Sungai Dua

 

Contact Person: Ms. Lim. Phone Number: 04-659 2998 / 017-216 2998. Address: 746, Jalan Sungai Dua, 11700 Gelugor, Penang.

Exercising caution: Enrolling children in registered childcare centres reduces the risk of negligence or abuse. — CHAN BOON KAI/The Star

BUKIT MERTAJAM: Kindergartens and nursery centres have continued to thrive in Penang – despite the hassle of getting the necessary licence to operate.

An operator of a kindergarten near Alma here, who wanted to be known only as Joo, went through the whole rigmarole to set up an adjacent childcare centre, which is expected to be up and running in a couple of months, almost a year after the process began.

After spending RM200,000 to convert a house into the intended childcare centre, there was red tape to contend with, she said.

“The whole process included engaging an architect to draw up the plan as well as submissions for various permits from the Seberang Perai City Council (MBSP), Fire and Rescue Department, Education Department and Social Welfare Department, which all have their own sets of rules.“The application to MBSP itself took about 100 days to complete,” she added.

Then, all her staff were required to undergo a mandatory three-month Permata Childcare Course. It cost her about RM1,000 for each staff member.

“In total, I spent between RM400,000 and RM500,000 to set up this centre. It would have cost me less if not for the delay in getting the licence,” she said in an interview yesterday.

Joo’s kindergarten has been running for the past 15 years, providing preschool education to some 60 children.

“Operating the childcare centre legally is for the long term and I don’t want to worry about it being shut down by the authorities.

“Parents, too, will be more confident about entrusting us with their children,” she said.

Joo said everything at the centre would be above board and adhere to regulations.

Another operator, who preferred not to be named, said it took her almost 10 years to get a licence to operate a kindergarten here.“When I took over the kindergarten from the previous owner in 2006, I did not know it did not have a permit to operate.

“I then halted operations and filed an application to the relevant authorities. I only managed to get the permit in 2016,” she said.Under the Penang Care Centre Registration Guidelines enforced since 2021, the council allows for a maximum of seven kindergartens, nurseries or childcare centres within a 400m radius on the island while nine of them (three each) are allowed within a 250m radius on the mainland.

It was reported that 63 nurseries, 34 childcare centres (taska) and 100 kindergartens were still operating illegally in Penang.State social development, welfare and non-Islamic religious affairs committee chairman Lim Siew Khim said although Penang had made various efforts to legalise them since 2017, including fee waivers and discount rates to encourage operators to submit their applications, many persisted in operating without a licence.

She said the Social Welfare Department had since issued a notice to limit enrolment of children until the centre could get mandatory certifications from the relevant agencies.

However, out of concern for the wellbeing of the children and their parents, the state still hoped that these unlicensed operators would be spared from being fined or closed down, Lim added.

Last Sunday, the Women, Family and Community Development Ministry advised parents and guardians to ensure their children were enrolled in taska registered with the Social Welfare Department to prevent incidents of negligence, abandonment or abuse.It said these childcare centres were regularly monitored and inspected by the department.

It also said the registration of childcare centres includes a requirement that each caregiver holds a Certificate in Permata Care Course, as well as proactive measures to protect children from potential harm in these facilities.

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More centres needed

The Government aims to have a workforce comprising at least 59% of women by 2020. To do that, we must have more registered childcare centres to cater to these women’s children, Women, Family and Community Development Minister Datuk Seri Rohani Abdul Karim said. On Aug 14, Sunday Star reported that Malaysia is far from its target of having 13,200 registered childcare centres by 2020. Currently, there are not enough centres to cater to 3.2 million children under the age of four whose parents are in need of these services.

Time for Malaysia to keep its edge in global chips

 

The government’s new National Semiconductor Strategy provides a clear roadmap for the country’s move up the global technology value chain.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

MALAYSIA’S semiconductor industry has been a source of national pride since Intel opened its first overseas assembly plant in Penang in 1972.

Since then, Malaysia has captured a 13% share of global testing and packaging, building a semiconductor industry that now accounts for 25% of gross domestic product.

The vibrant state of Penang is again at the top of the list for semiconductor investments, with dozens of major expansion projects underway.

There is a sense, though, that we are only scratching the surface.

With semiconductors only becoming more important to modern life, Malaysia’s chip sector is not just a business opportunity; it is an opportunity to put the country firmly at the centre of future supply chains in South-East Asia and around the world.

The government’s new National Semiconductor Strategy aims to do just that.

Backed by an initial RM25bil of public funding, the plan provides a clear roadmap for the country’s move up the global technology value chain.

The ambitious targets are a sign that Malaysia understands what’s at stake.

The government aims to attract RM500bil of investment into the sector, train 60,000 chip engineers and establish at least 10 Malaysian companies in design and advanced packaging.

None of this will be easy.

Chip factories and research hubs do not appear overnight.

Just putting a new chip design into production can take up to four months, involving hundreds of steps, including oxidation, photolithography, and etching.

Major new fabs or testing facilities can cost billions of dollars.

But while the new strategy will take time to show results, the stars are aligned in Malaysia’s favour. Businesses must look to seize this moment.

Building on strong foundations

For the best chance of meeting its semiconductor goals, Malaysia can call on a number of tried and tested ingredients.

The first is to acknowledge the power of free trade.

While semiconductor technology is in the geopolitical spotlight, Malaysia’s neutral position on global tariffs is a key part of its appeal to international businesses.

The country’s chip sector has a distinct advantage of being able to attract investment from both the United States and China – as well as many other countries.

Free trade zones are also a powerful pull for semiconductor companies that focus on re-exporting to overseas markets, such as in the outsourced assembly and test segment.

The concentration of skilled labour, specialised logistics and raw materials create an attractive ecosystem for new entrants.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

Consistent policies

Consistent and coordinated policies are also critical in giving businesses the confidence they need to make long-term investment decisions.

The new semiconductor strategy ties in with Malaysia’s New Industrial Master Plan 2030, which emphasises the country’s digital infrastructure.

And, of course, sustainability will be a powerful enabler.

International technology companies demand access to clean energy to meet their own emissions objectives, so additional investment in renewable capacity and upgrades to the electricity grid will be needed to sustain the country’s competitiveness.

Collaboration between industry, government and utilities has produced encouraging signs: Intel’s rooftop solar installation in Malaysia is its biggest outside the United States.

Micron’s Malaysian facilities were the first in its global network to be powered by 100% renewable energy.

A historic opportunity

Demand for more advanced processing is also transforming the chip sector, as customers look for specialised hardware to support new technology, including artificial intelligence.

We see across the wider region that high-tech ecosystems generate valuable ancillary business opportunities – such as data centres, services, and advanced materials.

In Penang, a new crop of advanced semiconductor facilities from the likes of Infineon, Intel and ASE Tech will require new materials, new workers and new services.

The new semiconductor strategy recognises the historic opportunity ahead.

We must also acknowledge that it is a complex, globally connected industry, and that international competition for a share of higher-value front-end processes is more intense than ever.

That said, the success of hi-tech hubs like Penang – where HSBC opened its first office in Malaysia in 1884 – is a great example of how a diverse community, strong logistics and a supportive policy framework can facilitate the growth of a multi-billion-dollar industry.

The rewards of getting this right are tantalising.

In the new area of digital technology, semiconductors are only becoming more essential for businesses.

While the prize is significant, achieving it will require a deep partnership between industry and policymakers – underpinned by strategic planning, investment in skills and a commitment to free trade.

With all that in mind, Malaysia’s chip strategy could not have come at a better time.

Noor Adhami is HSBC’s international banking global head and Karel Doshi is HSBC Malaysia’s commercial banking head. The views expressed here are their own.

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