MITI: Govt committed to develop semiconductor industry as strategic source of income

MITI: Govt committed to develop semiconductor industry as strategic source of income

26 Mar 2024

The government is committed to developing the semiconductor industry which is now a strategic source of income for the country, said Deputy Investment, Trade and Industry (MITI) Minister Liew Chin Tong.

In line with the expression, “semiconductor is the new oil”, he said trade and technology competition between China and the United States (US) in the semiconductor industry has benefited Malaysia.

This competition, according to Liew, has led multinational semiconductor companies to make strategic decisions to build a second supply chain and not to focus solely on one country to ensure a secure and resilient supply chain or “derisking”.

He was responding to a question by Datuk Ahmad Amzad Mohamed@Hashim (PN-Kuala Terengganu) who asked about the plans of the ministry in positioning the nation’s Electrical and Electronics (E&E) industry as a major semiconductor production hub to take advantage of the competition between the US and China in the chip war.

“Malaysia should seize the waves of competition between China and the US to provide a policy to create an environment for local companies to excel and generate high income,” Ahmad Amzad said.

Liew noted that many companies have selected Malaysia as a new location for their production facilities and the country has an advantage over other nations with a mature semiconductor industry ecosystem since the 1970s, especially the E&E cluster in Penang and Kulim, Kedah.

“Such investments are expected to continue to position Malaysia as one of the key investment destinations in advancing the global chip industry.

“Malaysia should seize this golden opportunity to expand the country’s semiconductor industry and become a high-value-added semiconductor producer with activities along the value chain, such as Integrated Circuit (IC) design, wafer fabrication, assembly and testing as well as technical marketing,” he said.

Liew emphasised that the government aims to ensure that investments in Malaysia will create value chains that create high-paying skilled jobs.

“We want to create a supply and value chain that encompasses local companies. We aim to create 100 technology companies with an annual revenue of RM1 billion before 2030.

“Currently, we only have nine local technology companies that can generate RM1 billion a year.

Another 10 companies generate between RM100 million and RM1 billion a year,” he said. 

Source: Bernama