Malaysia can do better in advanced packaging, semiconductor manufacturing
18 Feb 2025
Malaysia is well-positioned to enhance its role in advanced packaging and semiconductor manufacturing, supported by a strong infrastructure base and a highly skilled workforce.
RHB Research noted that the country stands to capture a larger share of the technology market as geopolitical tensions and supply chain diversification push semiconductor companies to explore new manufacturing hubs.
“However, investments in these technologies require patience, often taking five to 10 years to yield returns,” it said in a note.
The firm said government support mechanisms are needed to establish and grow semiconductor fabs.
It said a strong base of engineering talent is crucial to sustain advanced manufacturing to achieve good yield and research and development efforts.
“Government policies such as subsidies and taxes further enhance investment appeal by lowering operational costs. Third, reliable and competitively priced utilities like electricity and water are necessary to support high-energy-consuming fabrication processes,” said the firm.
It added that the trade war has accelerated the diversification of supply chains, pushing companies to explore regions like Southeast Asia for manufacturing.
The shift is influencing the locations these companies choose to invest in and produce their products.
“Navigating this conflict requires a balanced approach, avoiding excessive alignment with either side to maintain trade relationships and strategic positioning,” it said.
The firm maintained an ‘Overweight’ call on the technology sector.
Source: NST
