Technology as the stepping stone for innovation
30 Dec 2024
Malaysia stands at a defining moment in its semiconductor journey — an opportunity to reshape its future while building on its legacy as a manufacturing powerhouse. This is not just an evolution but a bold transformation — one that moves the country from beyond assembling components to becoming a driving force in shaping technologies that will define the industry’s future.
The launch of the National Semiconductor Strategy (NSS) in May 2024 by Prime Minister Datuk Seri Anwar Ibrahim marked a turning point. This landmark initiative provides Malaysia with a once-in-a-generation chance to rise above the competition, secure its relevance and establish itself as a pivotal player at the forefront of the global semiconductor value chain.
As demand for global semiconductors continues to soar, Malaysia cannot afford to rest on its laurels as a manufacturing hub. Instead, it must ascend the value chain, positioning itself as a creator of cutting-edge technologies and innovation. Diversifying capabilities and fostering innovation are no longer optional — they are essential to maintaining a competitive edge in an ever-evolving global market.
Yet, this transformation is not without its challenges.
Shaping a resilient future
As Malaysia sets its sights on becoming a global semiconductor leader, it faces a critical set of challenges — most notably, the shortage of skilled and relevant talent.
The industry demands highly specialised expertise, and we must take proactive steps to meet this requirement within the necessary time frame. A comprehensive talent programme is essential, one that inspires youth and displaced individuals to pursue opportunities in the industry, while also ensuring that educational institutions align with industry needs.
Equally pressing is the need to strengthen Malaysia’s semiconductor supply chain. Recent global disruptions have exposed vulnerabilities, underscoring the urgency to build resilient, localised supply chains. Strengthening these chains will not only secure the semiconductor industry’s future but also fortify Malaysia’s economic foundation, ensuring innovations reach global markets swiftly and without interruption, thus bolstering our competitiveness on the world stage.
As Malaysia pushes the boundaries of innovation, we must also foster a culture of entrepreneurship and creativity within local industries.
Aligning policy with practical innovation is key to maintaining our edge in the global tech race. This will require unprecedented collaboration between the public and private sectors, with a strong focus on fostering home-grown talent and companies. Together, we can lay the groundwork for a future in which Malaysia not only participates in the technological revolution but drives it forward.
Where innovation meets technology
To truly lead in the semiconductor sector, Malaysia must integrate local companies into every layer of the semiconductor ecosystem. Strengthening manufacturing capabilities is essential, but nurturing creativity and empowering local players to develop proprietary technologies is the game-changer. This shift requires a deliberate focus on innovation, transforming Malaysia from a participant to a pioneer in the global semiconductor arena.
A key priority in this transformation is advancing front-end semiconductor technologies, particularly in integrated circuit (IC) design and development. By fully capitalising on the global semiconductor boom, Malaysia must focus on IC design, become a leader in advanced packaging, and drive innovation in equipment and automation technologies. These areas are not just technical goals; they represent Malaysia’s ticket to becoming a critical node in the broader semiconductor ecosystem.
Guiding Malaysia’s semiconductor revolution
Since the awakening after the Covid-19 pandemic, hardly a day goes by without one hearing of how the electronics industry is key to the global economic scene. As competition intensifies, it has become increasingly evident that Malaysia must take decisive steps to stake its rightful claim in this critical sector.
Recognising this urgency, the prime minister has entrusted the Ministry of Investment, Trade and Industry (MITI) with the responsibility of formulating a comprehensive strategy, as highlighted during the National Investment Council meeting in early 2024.
As the secretariat of the NSS Task Force — led by MITI and chaired by MITI Minister Tengku Datuk Seri Zafrul Abdul Aziz — CREST (Collaborative Research in Engineering, Science and Technology) huddled in various conference rooms in discussion with key thought leaders, along with advice from our Special Advisory Board, which represents the top companies in the industry locally and globally. I felt both awe and pride, witnessing Malaysia’s brightest minds united around a transformative vision. From day one, I worked closely with these leaders and stakeholders, and witnessing the strategy’s debut when the prime minister announced it at Semicon Southeast Asia 2024 was a proud and nerve-wracking moment.
It was not just a policy launch — it was a turning point, a bold declaration of Malaysia’s ambition to lead in the global semiconductor industry.
Since its inception, MITI and CREST have played a pivotal role in shaping its direction, collaborating with industry leaders and stakeholders to ensure it addresses real-world needs. Today, this living, actionable blueprint requires intense collaboration with our triple-helix partners — academia, industry and government. From aligning talent development with industry demands to advancing technological capabilities, CREST has played a pivotal role in ensuring the NSS addresses real-world challenges while charting a path for Malaysia’s semiconductor aspirations.
Recently, we hosted two critical dialogues — the CREST Industry Workshop and the CREST Academia Workshop 2024 for NSS. These workshops demonstrate how CREST fosters a collaborative environment, bringing together thought leaders, researchers and practitioners to ensure the NSS evolves in step with industry needs and academic advancements. These sessions were not just discussions; they served as platforms for shaping tangible action plans to bridge gaps, identify opportunities and align efforts with Malaysia’s strategic objectives.
CREST’s commitment to talent development is further exemplified by initiatives such as The Great Lab Talent Development Programme. In collaboration with industry partners, this programme equips students with the hands-on experience and skills needed to excel in the electrical and electronics sector. It is part of our broader mission to build a steady pipeline of talent capable of meeting the evolving demands of the semiconductor industry. By providing access to industry-led projects and internships, CREST ensures students gain real-world experience, preparing them for success in this competitive field.
Through partnerships with universities and global leaders, CREST fosters an ecosystem in which knowledge flows freely between academia and industry. This collaboration accelerates technological development and cultivates a culture of continuous learning, ensuring Malaysia stays at the forefront of semiconductor innovation.
In a recent discussion, MITI Deputy Minister Liew Chin Tong emphasised the critical importance of achieving one of the key targets under the NSS: the setting up of 10 Malaysian semiconductor “unicorns” with RM1 billion in revenue each, along with the development of 100 related companies nearing that same threshold. This vision resonates deeply with us at CREST.
We have been at the forefront of SME (small and medium enterprise) development for years, launching programmes that provide the mentorship, networking opportunities and affordable workspaces needed for success. One such initiative is CREST Place, a collaboration with Northern Corridor Implementation Authority and Universiti Sains Malaysia, offering co-working spaces, private offices and an IoT (Internet of Things) Cloud Data Centre — an ecosystem designed to support start-ups. Through this initiative, we have nurtured more than 30 start-ups, including rising stars in IC design such as Oppstar Bhd and SkyeChip Sdn Bhd. CREST’s commitment to SME growth was further recognised when we were awarded the prestigious “Tokoh SME” by the Malaysia Service Providers Confederation for two consecutive years in recognition of our contributions to developing local businesses.
Policies that inspire action
While the NSS provides a strong framework, its success hinges on translating vision into measurable outcomes.
Malaysia needs robust think tanks, research institutions and innovation clusters to deliver tangible results. These ecosystems must foster transformative technologies, create high-value jobs and retain top talent.
By rooting growth in local industries, Malaysia can build a thriving, self-sustaining ecosystem while avoiding talent outflows to other markets.
Expanding Malaysia’s talent pipeline is equally crucial. This demands upskilling programmes, partnerships with global semiconductor leaders and robust STEM education initiatives. Addressing the skills gap ensures Malaysia meets industry demand while cultivating innovators who will shape its semiconductor future.
Innovating for self-reliance and sustainability
By fostering an environment that supports home-grown solutions, Malaysia can reduce its reliance on imported technologies while creating sustainable economic growth.
A robust policy environment, paired with strategic investments in innovation, will empower local companies to drive advancements in front-end semiconductor technologies.
This is not just about keeping pace with global players — it is about leading the way.
With the NSS as a guiding blueprint, Malaysia is primed to transition from a manufacturing powerhouse to a global innovation leader. The path forward will demand bold decisions, unwavering commitment and collective action. Malaysia can shape the semiconductor industry’s future, not just for itself but for the world.
This is the promise of the NSS and the potential of a nation ready to lead.
It is a challenging journey, but as the saying goes, every great achievement begins with a single step — and we are certainly stepping in the right direction.
With decisive action, continued investment in human capital and a commitment to innovation, Malaysia can rise beyond competing in the global semiconductor race — it can lead it.
As semiconductors drive the next wave of technological progress, Malaysia’s focus on innovation, resilient supply chains and home-grown talent will secure its place at the forefront of this transformative movement.
Jaffri Ibrahim is CEO of Collaborative Research in Engineering, Science and Technology (CREST), an industry-led organisation that leads efforts to strengthen the country’s electrical and electronics sector by fostering a market-driven ecosystem and advancing talent development
Source: The Edge Malaysia
