2023 Archives - Page 4 of 73 - MIDA | Malaysian Investment Development Authority
English
contrastBtngrayscaleBtn oku-icon

|

plusBtn crossBtn minusBtn

|

This site
is mobile
responsive

sticky-logo

Malaysia makes good start wooing some big names over, but it has lots more to do

 >Media & Events > Media Gallery>Video Gallery

Malaysia’s efforts to bring in foreign investors appear to be paying off, going by the slew of investment announcements involving big names and significant sums this year, from Amazon cloud unit’s US$6 billion planned investment here by 2037 announced in March to July’s announcement of Chinese automotive player Geely’s US$10 billion outlay to transform Tanjung Malim, Perak, into the region’s largest auto city.

Not forgetting also US semiconductor giant Texas Instruments’ RM14.6 billion expansion plan announced in June, followed by Tesla’s announcement in July of a strategic expansion into the Malaysian market, and the more recent AI facility venture that will see US chip giant Nvidia coming here.

In terms of total approved investments that comprise both domestic and foreign investments, the country has, from the start of the year till end-September, recorded RM225 billion worth of investments — the highest January-September cumulative sum in the last 10 years. The sum is 6.6% more than the RM211 billion that was recorded in the corresponding nine months in 2022.

The achievement is viewed positively by economists as they feel the Unity Government has managed to continue Malaysia’s trend of strong approved investment performance following the Covid-19 pandemic, but that same positivity is moderated by their expectation that plenty more needs to be done — both in facilitating the realisation of these investments, and attracting more investments.

Malaysia’s share of private investments or realised approved investments, in relation to the GDP, which has been dropping since 2017, has yet to recover to pre-pandemic levels. Sustainable economic growth is driven by private investments and savings, rather than consumption and government spending.

“It is heartening to see that (the approved investments) continues to remain at a high level as investments are one of the key indicators for the current year and future growth prospects,” said Sunway University Business School professor of economics Dr Yeah Kim Leng.

This elevated investment performance will boost investor confidence, economic growth and the national transformation to higher value-added activities via investments, predominantly in the medium- to high-tech space, he said.

Furthermore, he noted that Putrajaya had kept to its commitment of moving the share of investments between foreign and domestic sources closer to an equilibrium, with approved investments for 9M2023 comprising 55.9% (RM125.7 billion) foreign direct investment (FDI) and 44.1% (RM99.3 billion) domestic direct investment (DDI) .

In comparison, FDI made up 61% (RM163.3 billion) of approved investments last year with 39% (RM104.4 billion) DDI. Note, however, the approved FDI figure of RM163.3 billion was still short of the RM230.07 billion committed FDI announced by the government last year, suggesting that some investments remained in the pipeline.

Malaysia must walk the talk and act quickly

Even after investments have been approved, a lot has to be done on the government’s part to translate these investments into realised investments that can in turn positively impact the economy, said Socio-Economic Research Centre (SERC) executive director Lee Heng Guie.

So, walking the talk to make sure committed and approved investments are realised is key.

In October, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz said only close to 80% or RM593.5 billion of the RM753.9 billion in approved investments between 2018 and June 2023 were successfully implemented.

Given Malaysia’s past performance, SERC’s Lee expects only 80% of the country’s approved investments this year to be realised. A lot is dependent on the government’s efforts in facilitating the implementation of the investments.

“Depending on the type of investment — brown or greenfield — it will be realised at different rates. Greenfield investments will take longer as investors will have to look for land and build a factory, this will take time. Hopefully, the government realises this and understands the urgency for them — federal, state and local authorities — to work together.

“These investments have been approved, so make sure they get the best support and facilitation until their projects commence operations. I am sure MITI (the Ministry of Investment, Trade and Industry) continues to monitor the progress and provides policy intervention as necessary,” Lee said.

In other words, while approved investments serve as a good indicator of private investment levels that can be expected in the years ahead, these investments may still fall through or be delayed due to unexpected risks.

Aside from the possible lack of facilitation on the part of the government, external factors, such as the potential US recession that looms on the horizon, may derail investment plans.

Such a risk, coupled with a moderating implementation pace may result in a drop in approved realised investments to 70%, said Yeah.

“The most important is to ensure that the facilitation of the investments is expeditious, as the quicker they are realised the less impact external developments will have in the event of a change in the form of an adverse downturn,” he added.

Malaysia still lagging behind its neighbours

It is worth noting also that despite its record nine-month approved investments achieved this year, Malaysia is behind its regional neighbours when it comes to gross fixed capital formation (GFCF) relative to GDP, which measures how much of the new value that is added in an economy is invested rather than consumed.

“This is one of the key structural issues that has plagued the Malaysian economy,” Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said.

Generally, the higher the GFCF, the higher a country’s productivity growth tends to be, and in turn its GDP growth. Hence, it is considered a meaningful indicator of future business activity, business confidence and economic growth patterns.  

According to the World Bank, Malaysia is behind its neighbours with a GFCF of 18.23% in 2022, while other Asean member states range between a low of 20.64% (Singapore) and a high of 31.44% (Myanmar). In contrast, Malaysia had a much higher GFCF in the early 1990s before the Asian Financial Crisis, at above 40%.

An optimum GCFC level for an economy ranges between 25% to 30%, said Sunway University’s Yeah, to allow for a good balance of consumption and investment.

This suggests there is still room for Putrajaya to push the dial in attracting more private investments or invest more from its coffers — something which its fiscal space, unfortunately, does not warrant.
 
Another systemic issue is Malaysia’s sizeable reliance on unskilled labour, which results in the nation’s labour productivity growth declining, hence the economy is not growing at its full potential.

“To unlock this potential, the government needs to put its money into (building up) the right resources so that the economy becomes highly competitive and be able to grow much faster. According to World Bank data, the share of Malaysia’s research and development (R&D) spending to GDP is about 0.95% in 2020. This was in stark contrast to South Korea (4.8%), China (2.41%) and Singapore (1.89%),” Afzanizam said.

“Clearly, the government needs to invest more in education, be it from primary to tertiary education. We also need to invest in healthcare so that our society is healthy to work and do business. And that goes hand in hand with good infrastructure that facilitates the country’s productivity journey,” he added.

Source: The Edge Malaysia

Malaysia makes good start wooing some big names over, but it has lots more to do


Content Type:

Duration:

The Malaysian Institute of Economic Research (MIER) said Malaysia should take a more active role in semiconductor chip exports, aligning with global trends and potential investment outflows from China.

During the recent National Economic Outlook Conference hosted by MIER, the institute pointed out that Malaysia has the opportunity to enhance its capacity and become a hub for the production and export of chips, given its longstanding presence in the global semiconductor industry.

MIER also highlighted the need to improve the food supply chain network due to Malaysia’s reliance on food imports.

“As far as digitisation is concerned, the outcome of the deliberations highlighted that it is critical for SMEs to be future-proofed to succeed in this area.

“The SMEs need help because they are competing in an industry with huge telecommunications companies. Malaysia has to build an integrated ecosystem and improve country-to-country connectivity,” MIER said in a statement in conjunction with the conference that was released on Thursday.

Recognising artificial intelligence (AI) as a game-changing trend, MIER proposed a cloud-first policy, emphasising data transparency and governance, and proactive consideration of AI applications in healthcare and environmental sectors.

To reset the Malaysian economy, MIER recommended that the government pursues AI aggressively, with emphasis on the creation of agile frameworks that go beyond conventional policies.

“The development of the economy depends upon how successful the government is in creating a safe and secure environment for all citizens. It cannot be overemphasised that social protection must be framed not just as a policy but as a comprehensive framework,” it added.

MIER also said that there is an urgent need for the government to introduce a life cycle-based social protection system, providing adequate coverage from “womb to tomb.”

Thus, it suggested transitioning from social assistance to social insurance, creating a three-layered ecosystem involving private institutions, social insurance and social assistance.

Source: The Edge Malaysia

MIER urges Malaysia to play more active role in semiconductor chip exports


Content Type:

Duration:

The State Government will explore the Blue Economy in collaboration with foreign investors who specialise in the field.

Chief Minister Datuk Seri Hajiji Noor said the Blue Economy was included in the 12th Malaysia Plan 2021-2025 as an approach to stimulate the national economy, and the State Government intends to explore the field for economic development, creating job opportunities, and improving the people’s living standards.

Hajiji said the Blue Economy promises great potential in various sectors such as fisheries and aquaculture, logistics, tourism, renewable energy, mineral resources, biotechnology and pharmaceuticals, blue carbon, waste management and pollution control, research and development, and marine infrastructure.

“When I led a delegation to the Global Chinese Economic and Technology Summit (GCET) in China last November, I had invited investors to explore the Blue Economy concept with the State Government to develop the food processing sector. This is because Sabah has the longest beach in Malaysia with more than 1,000 kilometres of potential fish farming and other sea activities,” he said.

Hajiji said this when officiating the Synedrio Sabah Maju Jaya (SMJ) conference: Exploring New Treasures Through the Blue Economy Concept in Sabah (SMJ-EKOB 2023) with the theme ‘Beyond Limits, Unleashing Economy’ at Le Meridien Hotel here on Thursday.

The text of his speech was read by Sabah State Secretary Datuk Seri Sr Safar Untong.

Hajiji said he had also asked investors to consider putting money into the energy sector here, including fossil fuel and renewable energy sources such as solar and wind energy.

Therefore, he hopes that all parties involved in the Blue Economy concept will work hard to attract more foreign investors, including from China, to invest in the said concept.

“We have to realise that in the past, this was just an internal economy concept, but now the field has become a must to explore.

“Moreover, the geographical position of Sabah is very strategic as it is surrounded by an ocean spanning 37,300 square kilometres (sqkm), as well as its continental shelf of 116,800 sqkm and a coastline spanning 2,383 kilometres.

“Sabah has huge potential with its wealth of marine biodiversity. Therefore, the government is committed and takes seriously the development of the Blue Economy as we understand how big its implications are to the people, environment, and future,” he said.

Hajiji said the Blue Economy concept was introduced in 2012 by the United Nations (UN), which refers to the sustainable utilisation of marine resources for economic growth, improved living standards and the creation of job opportunities, while maintaining the sustainability of the marine ecosystem.

In an Association of Southeast Asian Nations (ASEAN) conference in Brunei Darussalam in 2021, the delegation including Malaysia had agreed to adopt Blue Economy in the ASEAN region.

Hajiji added that the SMJ Development Plan 2021 – 2025 which was launched on 29th March 2021, outlines the state’s development strategy by optimally utilising all the resources available in Sabah.

He said the nature of the SMJ Plan already provides room for exploration of new methods of resources to improve economic development and well-being of the people, at the same time preserving the environmental ecosystem.

“This is contained in the main core of the SMJ Plan under element J: Networking Infrastructure and Green Sustainability, which in principle supports the agenda of developing the Blue Economy in Sabah,” he said.

Regarding the SMJ-EKOB 2023 programme, Hajiji said it is a platform to create an economic framework that will determine the direction of the Blue Economy for Sabah.

Also present was SMJ Secretariat chief coordinating officer Datuk Rosmadi Sulai.

Source: Borneo Post

Blue Economy exploration with foreign investors – CM


Content Type:

Duration:

GoAuto Group and Careplus Group Bhd’s joint-venture company, NexV Manufacturing Sdn Bhd, is set to develop a new energy vehicle manufacturing and assembly plant in the Chembong industrial area, Rembau, starting next year, to be completed in 2028.

Go Auto Group chairman, Datuk SM Azli SM Nasimuddin Kamal said the plant, spanning 29.68 hectares, will be used for the assembly of the electric vehicle (EV) marque, NETA.

The plant will also be available for other EV brands to assemble their own completely knocked-down vehicles.

He said the estimated overall gross development value of the manufacturing and assembly plant development project, including the vendors, amounted to approximately RM600 million.

The first phase of the development entails the construction of the assembly plant, to commence in the first quarter of next year (Q1’24), while phases two and three will kick off in 2026 and 2028, respectively.

SM Azli added that the plant is expected to roll out its first product, the NETA V model, in Q1’25.

“We believe that with support from the principal company from China and having the latest EV product line and technology, we can be an EV leader in the region,“ he said in his speech during the opening ceremony of Careplus Mall which was officiated by Negeri Sembilan Menteri Besar Datuk Seri Aminuddin Harun.

SM Azli said this project can attract the interest of existing and new automotive component suppliers as well as investors from home and abroad to boost the EV automotive industry, at the same time creating jobs and setting up business networks for the EV production ecosystem.

He said in line with the government’s aspiration and continued commitment to reducing carbon emissions while boosting the number of EVs domestically, the company is determined to be among the pioneers of the green technology industry revolution in the country.

“Our vision is to lead the EV industry for the local and Asean markets. We are aiming for new energy vehicles to account for 85% of the entire portfolio of products to be released in the next five years,“ he said.

Source: Bernama

GoAuto-Careplus joint venture firm to build EV plant in Negeri Sembilan


Content Type:

Duration:

In the business world, one often makes jokes about mathematics; the famous one is perhaps when a job interviewee is asked what does one and one add up to, to which he replies, “What would you like it to be?” with a conspiratorial wink. Although the joke often alludes to working for the corrupt, the matter itself sometimes comes across in different fields that one plus one does not equal two. More times than not, that happens when something that should be exactly alike, when it is counted by two different organisations, it is, well, not.

Let’s take an example. Malaysia is so very reliant on foreign direct investments (FDI) and its impact on the country’s gross domestic product (GDP) is undeniable. Indeed, through time, it appears as if the entire country must bend over backwards to accommodate FDIs, even to the point of “importing” millions of foreign workers when tens of thousands of local workers, graduates even, are unemployed.

In researching several papers that we have written about industrialisation, trade, labour and associated topics, we came across such a discrepancy, and are at a loss to explain it. One believes that it boils down to minutiae, about how the subject is counted, compared with how it is done by another party. Certainly, one on this side does not equal one on the other side, even though they are supposed to be the exact same thing. There are international standards on how to count this, and that.

The item that we are talking about is the FDI numbers that have been announced by both the Malaysian government and United Nations Conference on Trade And Development (UNCTAD). There are discrepancies as per below:

The differences in the earlier years are significant, between 3% plus to around 9% between 2013 and 2017. Remember that we are talking about millions of ringgit each year, so, a 1% difference can have some large numbers of currency attached to it. The numbers only seem to converge in 2022, with a tiny 0.2% difference in favour of Malaysia.

Other ramifications immediately pop up. One is, who is over-declaring or who is under-declaring? Why the difference in counting? When I was a student in the US, everyone used a Hewlett-Packard calculator in finance; the stares of disapproval one got when one showed a Japanese calculator were enough to make you fear for your position. Any answer given by that person was immediately discarded as being “inaccurate”. That, however, cannot be the reason here; it most likely boils down to methodology. The rub is that Malaysia’s numbers are consistently lower compared with UNCTAD’s; given the impact that FDI has on Malaysia’s economy, one has to wonder if the GDP numbers themselves are understated.

Needless to say, that has ramifications for public policy decisions.

That hit on confidence is not something the country needs, as the first victim of a lack of confidence is the currency, the ringgit. Many expert comments have been emerging that Malaysia’s economic strategy, relying on exports (from which FDI feeds into), is inferior to Indonesia’s, which is domestic demand-driven and fed by their own manufactured brands and goods. Indonesia is widely expected to be Asean’s giant in a few years.

Thus, without doubt, there should be an audit of these numbers as compiled by the Ministry of Investment, Trade And Industry towards international standards. (Surprised it is not compiled by the Department of Statistics, Malaysia? So were we.) To do otherwise, to bring international standards towards Malaysia’s is so unthinkable that it would invite ridicule to even try.

Huzaime Hamid is chairman and CEO of Ingenium Advisors, Malaysia’s financial macroeconomics advisory

Source: The Edge Malaysia

Why the differences in Malaysia’s FDI numbers compared with UNCTAD’s?


Content Type:

Duration:

UOB Kay Hian Research (UOBKH) remains positive on the technology sector and hopeful the signs of recovery will be backed by imminent growth in 2024.

In a note, the research firm said the sector’s third quarter (3Q23) results were disappointing but there has been an improved visibility on recovery moving forward.

“In the 3Q23 report card, both the earnings disappointment and frail trading sentiment set valuation right back to mean reversion. The Bursa Malaysia Technology Index (BM Tech Index) closed lower by 37% since 2022 and at minus 3% year-to-date,” it said.

However, conditions are turning more bullish for the sector on a better risk-reward calculus, backed by an improving earnings outlook in 2024.

UOBKH Research said global semiconductor sales are expected to surge 13.1% year-on-year in 2024, after a sales contraction of 9.4% this year.

The contraction is closing to its end and breaking out from its zero parity, which could see the cycle reversing back to positive growth trajectory imminently.

“This reflects decent growth across all segments, led by memory (43.2%, after a sharp drop in 2023), followed by logic (plus 6.8%) and discrete semiconductors (plus 6.4%). In our view, this suggests sales of smartphones and smart devices are expected to rebound strongly,” the research firm said.

It added its empirical research on the sector’s cyclicality against the BM Tech Index also suggested the index is already on the brink of an upswing again after multiple months of consolidation.

Furthermore, equipment makers expect a strong comeback next year spearheaded by the ongoing investment cycle for medical devices and renewable energy (RE), followed by demand resumption for electric vehicles and autonomous driving in the 2Q24.

“Notably, 2024 sales growth of 38% is expected to outperform global benchmarks due to the US-China trade diversion and the entrenchment of manufacturing capabilities, with RE and medical-centric equipment makers championing the order book record,” it said.

Despite electronic manufacturing services (EMS) companies slowing down on order loadings, UOBKH Research said the respective EMS players are on the aggressive lookout for trade diversion-related opportunities.“Industrial EMS players, namely CAPE EMS and NationGate, are seeing promising prospects related to communication and server products, with some already in the advanced stage of commercialisation since 3Q23,” it noted.

The research house cautioned that even if there were downside risks in the 4Q23 especially on the small-mid cap local tech companies, the emergence of multinational players in Malaysia will result in a waterfall effect which will benefit the local ecosystem.

Source: The Star

Positive prospects in 2024


Content Type:

Duration:

United States-based Lattice Semiconductor Corporation is looking forward to growing its presence in Penang to take advantage of the state’s semiconductor ecosystem.

Its Worldwide Sales senior vice-president, Mark Nelson, said Penang would be the heart and centre of Lattice Semiconductor’s global operations as it serves multiple functions, including research and development (R&D), as well as applications and operations engineering functions.

“We like being here due to the large technical pool of experienced engineers, the ecosystem of partners that we can collaborate with here and the strong university structure to sustain the pipeline of future talent.

“Our Penang operations are important to the overall group because the products that the team develops here are also intended for the global market,” he told reporters after the official opening of Lattice Semiconductor’s new office here on Wednesday.

Nelson said the new office, with 23,300 sq ft of offices and lab space, is an upgrade from its first office when they opened in Penang in 2021.

He said the team currently has over 130 local employees, and the new office has a capacity of up to 200 employees.

“However, we are already thinking of expanding beyond that, and we look forward to continuing our expansion here,” he added.

Deputy Chief Minister II Jagdeep Singh Deo, who was also present at the opening ceremony, said Lattice Semiconductor excelled in the manufacturing of low-power programme solutions across diverse sectors and is ranked as a world-class supplier of Field Programmable Gate Arrays (FPGA).

“I was also informed that Lattice Semiconductor is planning to develop and roll out a university programme which includes technical workshops, advisory panels, internships, career talks and sponsorships.

“These strategic collaborations exemplify the transformative power of meaningful public-private partnerships, ultimately translating into the betterment of our communities and country,” he added.

Source: Bernama

Lattice Semiconductor to expand Penang operations


Content Type:

Duration:

The Ministry of Investment, Trade and Industry (MITI) is facing the challenge of increasing the rate of use of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) among local companies even though they have been enforced since 2022.

In a reply through the parliament website dated Dec 12, the ministry said it found that it still took time for local companies to understand the import duty reduction schedule of CPTPP and RCEP member countries and identify the products that would benefit the most through the reduction of the duties under the agreements.

“Local companies are still using other free trade agreements (FTAs) that have been in force for a long time such as the Asean Trade in Goods Agreement (ATIGA), the Asean-China FTA (ACFTA) and the Asean-Japan FTA (AJCEP) which offer duty rates that the same or lower,” it said in reply to Senator Tan Sri Low Kian Chuan’s question regarding the challenges and percentage of RCEP and CPTPP usage rates.

In order to increase awareness of the opportunities and benefits of the two FTAs, MITI is actively conducting engagement sessions with the industry.

Focus needs to be given to the benefits of CPTPP and RCEP for markets in countries where Malaysia does not have a bilateral or regional FTA, it said.

In 2023 alone, MITI has carried out more than 20 engagement sessions with various industry bodies including chambers of commerce and industry associations.

The Malaysia External Trade Development Corporation (MATRADE) has formulated a strategy to increase export promotion to the CPTPP and RCEP markets as well as the countries with which Malaysia first established FTAs, namely Canada, Mexico and Peru for Malaysian export goods that are subject to lower tariffs such as palm oil products, rubber products , wood products (such as plywood), electrical & electronic goods (E&E), automotive products and others, it said.

MATRADE also plays a role in bringing quality foreign buyers from CPTPP and RCEP member countries to match with local companies at international trade fairs organised in Malaysia such as Oil & Gas Asia (OGA), MIHAS, Defence Services Asia (DSA) and International Greentech & Eco Products Exhibition and Conference Malaysia (IGEM).

Regarding the achievement of CPTPP and RCEP benefits, the government measures it through the issuance of Certificate of Origin (CO) to Malaysian producers.

CO allows Malaysian producers to get preferential treatment through low or duty-free import duties in CPTPP and RCEP trading partner markets, it said.

For the CPTPP, a total of 5,224 COs worth RM1.91 billion have been issued from March 18, 2022 until Nov 30, 2023.

Meanwhile, for RCEP a total of 2,624 COs worth RM897.99 million have been issued, said MITI. 

Source: Bernama

Many companies still not benefitting from CPTPP, RCEP import duty reduction – MITI


Content Type:

Duration:

The renewed Border Trade Agreement (BTA) signed between Malaysia and Indonesia this year is expected to facilitate and further boost economic and trade activities between both countries.

Deputy Investment, Trade and Industry Minister Liew Chin Tong said the agreement is also expected to contribute to the improvement of the socio-economic status of the border areas in Malaysia and Indonesia within the Borneo region.

“To support economic activities in Borneo, Malaysia and Indonesia at the bilateral level have signed the BTA in 1970.

“The agreement has also been reviewed and negotiated since 2009 to ensure its continued relevance and suitability in the changing times.

“At the same time, the enhanced and improved BTA signed on June 8, this year, is expected to facilitate and further boost economic and trade activities between both countries, consequently contributing to the improvement of the socio-economic status of the border areas in both countries within the Borneo region,” he said during the question and answer session in Dewan Negara, today.

Liew said this in response to a question from Senator Jaziri Alkaf Abdillah Suffian on the government’s plan to increase trade agreements or economic cooperation, especially between Indonesia and Malaysia within the Borneo region.

Meanwhile, Liew said trade relations between Malaysia and Indonesia were established through the bilateral and regional framework, namely the Association of Southeast Asian Nations (Asean).

Following this, he added that both countries consistently explored opportunities and planned efforts to enhance trade and economic cooperation, whether on a bilateral or regional level.

Source: NST

Renewed BTA hopes to boost Malaysia-Indonesia economic activities


Content Type:

Duration:

Backed by strong fundamentals, Solarvest Holdings Bhd’s earnings are expected to grow by 53% in financial year 2024 (FY24) and 67% in FY25, respectively, says Kenanga Research.

The company is a leading local photovoltaic (PV) system contractor with a 30% local market share and has completed projects under the large-scale solar (LSS), Corporate Green Power (CGPP) and feed-in tariff (FiT) programmes driven by the government, as well as its own rooftop assets.

It is also building a portfolio of PV assets for recurring income, Kenanga Research said in a note to clients yesterday.

The company has also made some inroads into regional markets such as Taiwan, the Philippines and Singapore, the research house added.

According to Kenanga Research, the recently announced National Energy Transition Roadmap (NETR) lays down the pathway for Malaysia’s transition to renewable energy (RE) with a target of RE making up 70% of generation capacity mix by 2050.

“We foresee solar energy accounting for over 90% of the new RE capacity (more than 20GW) in Malaysia, backed by various initiatives including FiT programme, Net Energy Metering (NEM) mechanism, LSS and CGPP.

“The lifting of the export ban on RE and the establishment of a central electricity exchange operated by a single aggregator to ensure pricing transparency will provide additional growth impetus to the local RE sector,” the research firm said.

Given Solarvest’s multiple earnings drivers, Kenanga Research expects the company’s earnings to be supported by its outstanding engineering, procurement, construction and commissioning (EPCC) order book of RM289mil that will keep it busy for two years and a tender book amounting to 3.1GW peak (Malaysia: 52%, regional: 48%).

In addition, the group has asset ownership in LSS4 (67.3MW peak), its Powervest financing programme (88MW peak) and EPCC project opportunities amounting to at least 250MW peak through CGPP.

Kenanga Research, which has an “outperform” call on the stock, has set a target price of RM1.47.

“We like Solarvest for the bright outlook of the RE market in Malaysia, underpinned by the government’s strong commitment towards RE, the export potential of RE and the increased commercial viability of solar-power projects on falling solar panel prices,” it added.

The company also has a strong market position, execution track record, clientele and value proposition of its PV system financing programme.

Furthermore, Solarvest’s strong earnings visibility is backed by a sizable outstanding order and tender books, and recurring income from a growing portfolio of solar assets, added Kenanga Research.

The key risks include the dependency on the government’s RE policy, low entry barriers, potential rise in project costs and asset ownership risks.

Source: The Star

Bright future on the books for Solarvest


Content Type:

Duration:

Malaysia is seeing exponential growth in electric vehicles’ (EV) sales yearly and the government is optimistic the positive momentum will continue strongly through end-2023, Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz said.

To date, Malaysia has recorded more than 100,000 registered electrified vehicles, he said.

“More than 12,000 battery electric vehicles (BEV) have been registered since 2011 with the number of BEVs registered this year alone surpassing 9,000 units,” he said in his address during the soft launch of the Malaysia Autoshow 2024 (MAS 2024) here, today.

For the first ten months of 2023, Malaysia’s vehicle sales registered a strong growth, up by 11.6 per cent to almost 647,000 units.

Tengku Zafrul said he believed that EVs would be the catalyst for the growth of Malaysia’s manufacturing industry exports.

Elaborating further, the minister said the electrical and electronics products (E&E), which is a major supply chain to the EV sector, contributes 40 per cent out of 80 per cent of Malaysia’s export from the manufacturing sector.

“Hence, there is a lot of potential in the new generation vehicles wherein more components, for example, semiconductor composite, chips component in a typical car today, or even a hybrid car will be around 1,500 chips (needed) in one car.

“When you look at EV cars, it can go up to at least 3,000 chips in one car and these chips come from the E&E sector,” he stressed.

Malaysia remains an attractive destination for EV investors. Between 2018 and June 2023, the Malaysian Investment Development Authority (Mida) approved 59 projects worth RM26.2 billion in the EV sector and its related ecosystems encompassing vehicle assembly, manufacturing parts and charging components.

Meanwhile, Tengku Zafrul said, to accelerate the National Energy Transition Roadmap (NETR) launched in August this year, the Ministry of Investment, Trade and Industry (Miti) has a set a national target, whereby 20 per cent of Malaysia’s annual new car sales would consist of electrified vehicles by 2030, 50 per cent by 2040 and 80 per cent by 2050.

“Miti’s commitment to bring Malaysia to the forefront of the electric vehicle revolution can be seen through the National Automotive Policy or NAP2020.

“The NAP provides the local automotive industry with a clear direction for future preparations, through the development of next generation vehicles including EVs that are energy efficient and environmentally friendly,” he said.

As an ecosystem, the automotive industry contributes around four per cent to Malaysia’s gross domestic product (GDP). By 2030, the government has targeted to achieve RM104.2 billion in GDP contribution with a total production volume of 1.47 million vehicle units.

Last year, the Malaysian automotive industry achieved production output of over 700,000 vehicles due to the strong demand post-pandemic.

Source: Bernama

Tengku Zafrul: Malaysia sees exponential growth in EV sales, positive momentum to continue


Content Type:

Duration:

Malaysia’s automotive industry picked up speed this year, bolstered by robust sales for new motor vehicles, efforts to ramp up the usage of electric and energy-efficient vehicles as well as higher technology investments in line with the government’s net zero carbon emission goals.

Analysts and industry experts believed this Total Industry Volume (TIV) for this year would surpass last year’s, marking the second consecutive year of achieving an all-time high.

Key growth drivers this year included the fulfilment of bookings received during the Short-Term Economic Recovery Plan (Penjana) sales tax exemption period last year and aggressive campaign sales mainly by the national car producers, leading to sustained demand and a high volume of order backlog.

The resilient domestic economy in the first half of 2023 (1H 2023), new model launches and improved industry supply chain environment also helped boost sales of new motor vehicles.

Strong 2023 TIV

According to the Malaysian Automotive Association (MAA), sales of new motor vehicles grew strongly in 1H 2023, with TIV rising by 10.3 per cent to 366,037 units from 331,746 units in 1H 2022.

The national auto makers’ sales amounted to 220,702 units, representing a 19 per cent hike year-on-year.

During 1H 2023, the industry’s total production volume rose 14 per cent to 362,535 units compared with 317,933 units in the same period last year.

Year-to-date sales volume as of October this year rose by 12 per cent to 646,840 units compared with 578,917 units recorded in the previous year’s corresponding period.

MAA president, Mohd Shamsor Mohd Zain, said the recovery in the local automotive industry has been going strong in the last two years, with TIV exceeding the pre-Covid levels.

He said favourable incentives introduced by the government during the early days of the post-pandemic recovery jump-started automobile demand.

The strong momentum is expected to remain in November and this month, and this year’s TIV will likely exceed last year’s all-time high of 720,658 units.

“This year’s TIV will be another all-time record for the local automotive industry. It will also be the second consecutive time the annual TIV exceeds the 700,000-unit mark,” he told Bernama.

Investments and Expansions

The Automotive industry can be regarded as one of the country’s prominent and busiest industries this year, as reflected by the numerous government policy introductions, new multi-billion-ringgit investment injections from both local and foreign investors, as well as aggressive business expansions.

The government has rolled out the New Industrial Master Plan 2030 (NIMP 2030) to transform Malaysia into a high-tech industrialised nation with high-growth industries such as electronics, chemicals, and automotive manufacturing at the forefront of the RM95 billion long-term strategic plan.

The government has identified the Electric Vehicle (EV) sector as a high-impact sub-sector under NIMP 2030, and policies related to the sector will be reviewed every few months to support its growth.

As for the private sector, Prime Minister Datuk Seri Anwar Ibrahim revealed in July that Chinese automaker Zhejiang Geely Holding Group Co Ltd (Geely) will invest a whopping US$10 billion (RM46.7 billion) to turn Tanjung Malim in Perak into the region’s largest auto city.

Following this, DRB-Hicom Bhd has entered into a master collaboration agreement with Geely to execute the Automotive High-Technology Valley (AHTV) development in Tanjung Malim.

“The AHTV’s focus will not only be on the production of automobiles of various makers but also the manufacture of high-technology components and parts for the new energy vehicles.

“This will further expand the capability of local vendors towards specialising in high-technology manufacturing,” DRB-Hicom said.

Meanwhile, Bernama had reported on August 24 that Sime Darby Bhd would acquire a 61.2 per cent stake in UMW Holdings Bhd from Permodalan Nasional Bhd for RM3.57 billion in cash to further scale up and strengthen its presence in the Malaysian automotive sector.

The transaction, one of the largest merger and acquisition deals in Malaysia, will strategically transform Sime Darby into a leading automotive player in the country with the addition of high-volume mass-market brands, Toyota and Perodua, capturing up to 60 per cent of domestic automotive TIV.

Huge EV Potential

With Malaysia being a major electrical and electronics manufacturing hub in Southeast Asia, automakers and automotive investors here can seamlessly leverage this capacity to secure their supply chains for growing their production of next-generation vehicles, EVs and energy-efficient vehicles.

The government is aggressively promoting a conducive EV ecosystem in Malaysia, ramping up efforts to expand and enhance the country’s EV charging infrastructure.

Putrajaya said it is targeting to have 10,000 EV charging stations in place by 2025. As of November 1, a total of 1,246 charging stations have been installed nationwide.

This year, the local industry has seen the emergence of new players, especially in the EV market, such as world-renowned automotive brands Tesla from the United States as well as BYD and Neta from China, creating greater competition in the local market.

On October 2, Tesla Malaysia officially opened its headquarters in Cyberjaya to provide an all-in-one customer experience.

Mohd Shamsor said the entry of these new brands has added greater excitement to the market, spurring more interest among consumers, naturally providing more choices and better overall services amid increasing competitiveness.

The number of registered EVs grew to over 3,400 units last year and surpassed 7,500 units in September this year, compared with an average of 300 units in the prior years.

BMI, a Fitch Solutions company, projected Malaysia’s EV sales to quadruple this year, although the EV penetration rate in the country would stand at a mere 1.8 per cent.

ICE to Remain Prevalent

According to MAA, the volume of EVs sold in Malaysia is still very small, as around 10,000 units of EV will likely be registered this year (including sales of MAA members and non-members), constituting less than 2.0 per cent of the annual TIV.

\

Mohd Shamsor said although the global EV market is tapering in growth as economies reevaluate their net zero journey, Internal Combustion Engine (ICE) vehicles will stay prevalent and relevant for longer in Malaysia.

He said in countries like Malaysia, where the EV charging infrastructure is still in its infancy and the energy mix is being generated from traditional and non-renewable sources, ICE will remain the more affordable and pragmatic option for the next few years.

“As an industry, we continue to remain vigilant and ready for the ‘what-is-next’ (scenario) to ensure that Malaysians have the most viable, affordable and practical choices in terms of green technologies.

“One such example is Hybrid Electric Vehicles (HEV) as an immediate stepping stone to contribute to and support the realisation of net zero carbon emission goals for the country,” he said.

According to Mohd Shamsor, a step-by-step approach starting from HEV is the ideal way to phase out the existing conventional ICE vehicles.

As the first step towards mass usage of electrified vehicles, HEV will bridge the gap between ICE and EV to attain quicker carbon neutrality for the country, he added. 

Source: NST

Automotive sector in higher gear this year with TIV set to hit all-time high


Content Type:

Duration:

At least 80% of the RM225 billion investments approved for the January-September 2023 period are expected to be implemented within 18-24 months.

Deputy investment, trade and industry minister Liew Chin Tong said that typically, a certain duration would be needed before investors start operations.

“When approved by the Malaysian Investment Development Authority, 80% will be implemented within the period I mentioned.

“Generally, it (the company) will take time to get approval for the site and other approvals.

“Then, it will be necessary to bring in machines or manufacturing tools and finally start the manufacturing process,” he said when winding up the debate on the 2024 supply bill in the Dewan Negara today.

Liew said the RM225 billion investment figure was a successful result of various efforts and initiatives implemented by the government, including official working visits and missions.

“This is one of the highest investment achievements in history.

“This success is also proven based on fDi Intelligence data, stating that Malaysia is among the six countries that recorded the highest amount of ‘greenfield’ foreign direct investments for the January-August 2023 period,” he said.

He said Malaysia also benefitted from the current situation of uncertain geopolitical tensions, namely the US-China trade conflict and the Russia-Ukraine crisis, which led to a shift in the global supply chain.

“As a result of this situation, Malaysia has become an alternative hub for manufacturing and trading activities for multinational companies that carry out the ‘China plus one strategy’ to diversify and reduce the risk (de-risking) of the supply chain with the aim of building a more resilient supply chain,” he said.

Trade barriers

Meanwhile, he said the Malaysian External Trade Development Corporation office in the US would continue to monitor and report current developments on any trade barriers involving the country’s exports.

This was attributable to the issue of possible trade barriers by Western countries, especially the US, following the introduction of the Uyghur Forced Labour Prevention Act (UFLPA) to prevent the exports of raw materials, finished and semi-finished goods manufactured in Xinjiang, China, due to human rights violations in the region.

The law was also created to prevent Chinese manufacturers from evading anti-dumping duties and countervailing duties on solar panels and electronic goods.

Vietnam, Thailand, Cambodia and Malaysia benefitted and enjoyed tariff exemptions until June 2024 for electrical and electronics exports, especially semiconductors, to the US following restrictions imposed on imports from China.

Since this regulation was implemented in June 2022, Malaysian exports of solar panels, microchips and electronic equipment to the US are subject to strict inspection by the relevant country’s authorities.

Source: Bernama

80% of RM225b approved investments to be implemented within 18-24 months


Content Type:

Duration:

DRB-Hicom Bhd and Zhejiang Geely Holding Group Co Ltd (Geely Holding) marked another significant milestone in the development of the Automotive Hi-Tech Valley (AHTV) in Tanjong Malim, Perak, with the signing of a joint-venture (JV) agreement between the two companies today.

The JV agreement, which followed the master collaboration agreement signed in October 2023, outlines the key principles of the strategic collaboration, alignment on objectives, and terms of the partnership.

Prime Minister Datuk Seri Anwar Ibrahim, who witnessed the exchange of documents earlier today, said the government is committed to providing the relevant and required support for the AHTV development that is being actively carried out by Geely and DRB-Hicom

In a post on social media platform X (formerly Twitter), Anwar, who also had at a discussion this morning with Geely Holding chairman Eric Li, said he emphasised that investments made in Malaysia must bring benefits to local talents and businesses.

“Geely shared that among the draws that drove them to invest in this country is the benefits from Malaysia’s trade relations with countries such as the United States and European Union, in addition to its shareholding in Proton,” the Prime Minister said.

Group managing director Tan Sri Syed Faisal Albar signed the JV agreement on behalf of DRB-Hicom while Geely Holding was represented by its chief executive officer Daniel Li. Also present were Eric Li and Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz.

In a statement, DRB-Hicom said a JV company will leverage on the respective strengths and expertise of DRB-HIicom and Geely Holding in establishing AHTV as the international next generation vehicle hub in Malaysia.

AHTV will encompass extensive automotive and mobility solutions across the value chain, from a full-fledged high technology global research and development centre, to world-class automotive original equipment manufacturers and manufacturing clusters.

In addition, it would support services within an associated ecosystem, such asl ogistics, training and learning institutions within a smart city for the automotive industry, DRB-Hicom said.

Source: Bernama

PM Anwar hopes DRB-Hicom, Geely JV project will help local talents, businesses


Content Type:

Duration:

RAM Holdings Bhd has emphasised the necessity for Malaysian companies to align with environmental, social, and governance (ESG) standards to secure their positions in global supply chains.

Deputy group chief executive officer Promod Dass says Malaysian companies must not only uphold financial standards but also be prepared to meet elevated ESG compliance requirements to stay in line with global trends.

Dass highlights significant global ESG regulatory changes, such as the European Union’s Carbon Border Adjustment Mechanism, The Sustainable Finance Disclosure Regulation, the UK Sustainability Disclosure Requirements, and the German Supply Chain Due Diligence Act (German LkSG).

“Some of these regulations would enhance transparency in the sustainable investment market.

“Their purpose is to prevent misleading environmental claims, known as greenwashing, about investment products and to increase the flow of investment into sustainable products to accelerate the transition to a low-carbon economy,” he said in a statement.

Dass mentioned that Malaysia’s regulators and financial and capital market participants have been gearing up for the worldwide ESG trend since September 2019 through the Joint Committee on Climate Change.

“It has led to awareness and changes in business approaches. Now it is time for Malaysian corporations to transform and position themselves well in this ESG-centred world,” he said.

Source: NST

Malaysian companies must emphasise ESG standards to secure global supply chain positions


Content Type:

Duration:

Prime Minister Datuk Seri Anwar Ibrahim has called on all relevant parties to emphasise the need for the country’s investment landscape and ecosystem to be more creative and investor-friendly.

In a post on his official Facebook today, he said the parties involved were also called upon to continue efforts in accelerating the process of national development so that the set goals can be achieved.

“I also emphasised the need to look at the development of a complete ecosystem that is appropriate in developing a data centre to ensure that the proposed development of the data centre has added value and is more competitive,” he said.

Today, Anwar presided over the 43rd National Physical Planning Council Meeting, which is a forum for the federal government to consult with state governments regarding urban and rural planning matters and the physical development of the country, in line with the Federal Constitution.

Anwar said in the meeting, that he had emphasised efforts to speed up the development approval period to catalyse investment and improve the ease of doing business in Malaysia.

According to him, efficiency and speed in managing development approval is something that investors see as more important than financial incentives.

“Investors are also more interested in the availability of infrastructure and human capital expertise that allows them to start operations quickly, per the investment made.

“If Malaysia is not successful in this aspect, this may likely cause investors to move to other destinations in the region,” he said.

Source: Bernama

PM Anwar wants Malaysia’s investment landscape, ecosystem to be more creative and investor-friendly


Content Type:

Duration:

Penang has again proven its allure to both new and existing investors with a staggering investment inflow of RM34.6 billion in the manufacturing sector in the third quarter of 2023, an impressive 421 per cent year-on-year increase.

Chief Minister Chow Kon Yeow said this exceptional growth has been primarily driven by foreign direct investments (FDI), which accounted for an impressive RM33.0 billion or 95 per cent of Penang’s manufacturing investment inflow during this period.

“This substantial influx of FDI underscores the resolute confidence international investors place in Penang’s potential and the lucrative opportunities it presents.

“Equally deserving of acknowledgment are our domestic investors, whose steadfast support has played a pivotal role in fostering our flourishing industrial landscape,” he told a press conference here today.

He said domestic direct investments (DDI) contributed RM1.6 billion, constituting the remaining 5 per cent of manufacturing investment inflow.

Chow said Penang also recorded a remarkable total approved investment of RM44.9 billion within January to September 2023 through across various sectors, encompassing manufacturing, services and primary sectors.

“Notably, the approved manufacturing FDI inflows stood at an astounding RM35.8 billion, signifying an impressive 634 per cent year-on-year increase.

“Penang has firmly solidified its position as the leading contributor to the nation’s manufacturing FDI, capturing an impressive 42 per cent share during this period,” he said, adding that prominent contributions came from countries such as the Netherlands, the United States and Singapore, accounting for 95 per cent share of Penang’s approved manufacturing investments.

He added that despite a 15 per cent year-on-year decrease in domestic direct investments (DDI) at RM3.1 billion, the total approved manufacturing investments for the first three quarters of 2023 stand at an impressive RM38.9 billion, making Penang the highest contributor among all states, with 39 percent share in Malaysia’s approved manufacturing investments in the said period.

Meanwhile, Chow said according to the Malaysian Investment Development Authority (MIDA), the investments flows involved 107 projects and are expected to generate 11,121 new job opportunities in the state which were primarily driven by its key industries, namely electrical and electronics, machinery and equipment and fabricated metal products industries.

“These sectors have collectively accounted for a remarkable 98 per cent of Penang’s total approved manufacturing investments in the first nine months of 2023, underscoring our pivotal role in driving Malaysia’s participation in the global supply chain,” Chow said, while thanking MIDA and InvestPenang for their efforts in creating a conducive environment for strategic investments.

Chow is confident that Penang’s versatile ecosystem and strong fundamentals will continue to attract investments and are ready to support the needs of industries for next-generation technologies, innovative products and long-term growth strategies, all underpinned by its highly-qualified talent pool.

Source: Bernama

Penang records RM34.6 bln 3Q investment inflows in manufacturing sector


Content Type:

Duration:

The Malaysian Investment Development Authority (MIDA) is committed to unearthing cost-effective mechanisms aimed at accelerating investments in sustainable projects in sectors such as renewable energy, hydrogen and green growth, in line with the government’s aspiration for net-zero emissions by 2050.

According to MIDA chairman Tan Sri Dr Sulaiman Mahbob, emphasis has been placed on promoting research and development (R&D) activities and identifying the latest technology trends as well as emerging technologies. “Collaborative efforts with industries, both local and foreign R&D institutions, as well as technology providers are also pursued,” he told Bernama.

He said the strategic focus is geared towards nurturing local expertise in the evolving dynamic innovation landscape, ensuring Malaysia remains at the forefront of maintaining a leading position in technological advancements in sustainability and environmental, social, and corporate governance (ESG) practices.

This is in line with the New Industrial Master Plan (NIMP) 2030, a blueprint for resilient industrial transformation and sustainable growth and the ESG Framework.

Sulaiman expressed concerns about stand-alone and non-exporting small and medium enterprises (SMEs), which may not readily fully recognise the significance and importance of integrating ESG into their business operations. “Ensuring an inclusive journey where no one is left behind is important to us,” he said.

It is imperative for all industry players, regardless of size or sector to embark on an ESG transformative path in light of Malaysia’s net-zero emissions, he added.

“Hence, MIDA will lead deals and negotiations for all investment projects in the manufacturing and selected services sectors by redesigning promotional strategies and activities to emphasise the element of ESG sustainable practices,” he said.

Key focal points include enhancing talent management for industrial development, moving comprehensive ESG adoption, as well as developing and strengthening the industrial ecosystem in Malaysia.

“We are also proposing the right supporting tools such as AI-driven technologies for local industry players by working together with the Ministry of Investment, Trade Industry (MITI), the R&D institutions, industry and other government key stakeholders to streamline ESG efforts and facilitate a wider ESG adoption in Malaysia,” he said.

To remain relevant in business, he said SMEs have no other alternatives but to adopt ESG practices to remain in the global supply chain as the anchor companies must comply with the Scope 3 emissions.

Companies adopting sustainable business practices will have a competitive advantage such as new markets and sustainable supply chain development and promote a stronger brand identity.

Furthermore, the inclusion of ESG reporting in earnings reports is trending among businesses. Investors and lenders are becoming highly attracted to companies that invest in ESG and use ESG disclosures to shed light on their sustainability efforts.

He also pointed out that many local businesses, particularly SMEs, face financial constraints in transitioning to sustainable practices, in which the initial investment required for sustainable technologies and infrastructure improvements poses a considerable barrier.

Sulaiman emphasised MIDA’s role in providing comprehensive support and facilitation, including initiatives like MIDA’s Project Acceleration and Coordination Unit (TRACK) that aim to enhance business process efficiency and ensure a smooth investment journey.

“In line with the government’s pro-active approach to ease of doing business, MITI has set up the Invest Malaysia Facilitation Centre (IMFC) at MIDA headquarters from Dec 1, 2023,” he said.

As of September 2023, MIDA has approved 4,073 green projects valued at over RM38.9 billion worth of investment. Notably, green technology investments recorded a significant 24.6% growth for the period of January-September 2023 over the same period last year, totalling RM1.5 billion, comprising 490 projects.

These investments cover various green technology initiatives, including renewable energy, energy efficiency, integrated waste management, green buildings and services which are under Mida’s purview.

Additionally, electric vehicle components and assembly reached RM291.3 million of approved investments from January to September 2023.

Source: Bernama

MIDA emphasises technology adoption, ESG practices for sustainable investment ecosystem


Content Type:

Duration:

Artificial intelligence (AI) is set to be the next growth engine for the technology sector.

Stocks linked to this sub-segment of the tech space have seen strong gains this year.

Analysts believe the run has further legs to go with companies such as Nvidia Corp, Advanced Micro Devices and their related branded manufacturers in Taiwan such as Asustek Computer Inc gaining strong interest of late.

AI requires computing power that is used by graphics processing unit (GPU) in computers and they are the key to the training of neural networks, the enabler of AI.

Apart from powering computer games and graphics/video-intensive computers, GPUs help quicken the training of neural networks which are a key component of many algorithms enabling AI.

The two main GPU designers and makers in the world are Nvidia and AMD.

It appears that tech stocks on Bursa Malaysia have not caught up with the strong rally in the United States as the surge in interest since late last year are limited to makers of GPUs and their related companies.

There was much buzz last week on the local tech space with Nvidia founder and chief executive officer Jensen Huang dropping by several countries in the region including Malaysia to announce business ventures.

For Malaysia, Nvidia last Friday announced a data centre partnership and it also announced last Sunday it will set up a manufacturing base in Vietnam.

YTL Power International Bhd announced a collaboration with Nvidia to deploy AI infrastructure with Nvidia H100 Tensor Core GPUs at its YTL Green Data Centre Park in Kulai, Johor.

YTL Power’s share price received a boost with this development and saw gains of almost 15% last week alone. The company is now considered an AI-linked firm by market players with this partnership.

SPI Asset Management managing partner Stephen Innes said the surge in share prices of AI-linked companies is just the beginning and investors have not fully digested the strong upside prospects of this latest development in the tech space.

“We are only seeing the tip of the iceberg on a decade-long transition to AI.

“Right now, most of the focus is on the companies making the tools necessary to power the AI revolution that appears to be fast descending upon businesses and, eventually, the broader economy,” Innes told StarBiz.“In the immediate sense, such a build phase may also benefit the ‘shovel providers’ of this ‘gold rush’ – the companies that provide the computing power and tools necessary to build the models needed to compete.

“For this year, at least, Nvidia has stood out as that hardware store on the prospecting hill,” he added.

Innes expects Nvidia will continue to trend higher and be trading at US$600 per share next year and over US$1000 in the longer term.

High-net-worth investor and former investment banker Ian Yoong Kah Yin said investor interest in the domestic tech sector will be AI-driven, moving forward.

“The listed companies in this space are YTL Power, ITMAX System Bhd and Straits Energy Resources Bhd. YTL Corp and YTL Power, its subsidiary, are in data centres.

“ITMAX is in video surveillance and analytics. Straits Energy is into oil bunkering, telecommunications solutions and AI-enabling services,” Yoong told StarBiz.YTL, YTL Power, ITMAX and Straits Energy are trading at financial year 2024 price-to-earnings ratio (PER) of 10, 8, 19 and 10 times, respectively, he noted.

Meanwhile, Yoong said the wider local tech space on Bursa Malaysia is expected to remain in the doldrums in the first half of 2024, with recovery seen earliest in the second half of next year.

“The Bursa Malaysia Technology index currently commands an above-average valuation, with a forward PER multiples of 25 times. The historical average PER is 21 times.

“The semiconductor-based sub-sector is expected to report weak earnings in the next two to three quarters,” Yoong added.

Commenting on tech stocks’ performance on Bursa Malaysia, Rakuten Trade head of equity sales Vincent Lau said many Malaysian tech stocks appear to be stuck in a trading range.

“Fund managers are staying on the sidelines and I think they need to see fourth-quarter numbers first.

“Ours are lagging behind and only in the United States it seems to be doing well. Even in Hong Kong the tech sector is struggling,” Lau told StarBiz.However, a tech recovery is still on track and the fourth quarter might be supported by restocking activities.

He said how strong will the recovery be is still the main question.

“But in the AI space, it still has some legs to run while for electric vehicles, it continues to be another growth sector,” Lau said.

“We may be at a short-term bottom now, as I think it will be quite a firm recovery moving into 2024. We may be at an inflection point.”

On YTL Power-Nvidia partnership, RHB Research said it has a long-term positive view on this development.

“The project may also boost its data centre take-up rate in Johor.

“YTL Power’s earnings growth should strengthen upon the successful delivery of the project delivery in the long run but investors ought to take note that additional capital expenditure requirements ahead could be rather intensive,” it said in a note.

Source: The Star

Boom time for Malaysian AI


Content Type:

Duration:

BATTERY manufacturer INV New Material Technology (M) Sdn Bhd will invest RM6.4bil to set up its first-ever manufacturing plant in Penang.

The project at Penang Technology Park@Bertam in Kepala Batas will be overseen by its parent company Shenzhen Senior Technology Material Co Ltd, which is globally renowned for its lithium battery separators.

INV New Material Technology chairman Chen Xiufeng said the new plant would be the first lithium separator factory in the Asean region and that it would be completed in two phases in 2026 and 2028.

“Once operational, the plant will produce four billion square metres of coated and wet-type separators annually,” he told Buletin Mutiara during a recent groundbreaking ceremony.

Chen also provided insight into the magnitude of the project.

“Spanning 26.7ha with a total building area of approximately 400,000sq m, it is poised to become the largest production base for low-carbon separators in Asean and a key player in the global supply chain for the industry.

“As a leading enterprise in the separator industry, we will further intensify our efforts in developing the Asean market,” he said.

Penang Chief Minister Chow Kon Yeow, who officiated at the ceremony, congratulated INV and Shenzhen Senior Technology Material on the project.

He said Penang was honoured to be chosen as the location for INV’s plant as it highlighted the state’s well-developed industrial ecosystem.

“The Penang government is focused on attracting companies which are committed to developing cutting-edge technologies and sustainable investing.

“The lithium-ion battery separator industry, with its ties to renewable energy, aligns perfectly with our goal for a greener and more sustainable future,” said Chow, who also commended INV for its commitment to environmental responsibility.

He concluded with an assurance of continuous facilitation and support for strategic investments in both state-developed and private industrial parks.

“We remain dedicated to developing future-proof infrastructure and ramping up the talent supply.

“All this will ensure a sustainable investment ecosystem in Penang,” the Chief Minister added.

Also at the groundbreaking ceremony were Chinese consul-general in Penang Zhou Youbin, Seberang Prai City Council mayor Datuk Azhar Arshad, InvestPenang chief executive officer Datuk Loo Lee Lian, Penang Malaysian Investment Development Authority director Muhammad Ghaddaffi Sardar Mohamed and deputy chief executive officer Sivasuriyamoothy Sundara Raja.

Source: The Star

RM6bil battery factory coming up


Content Type:

Duration:

Malaysia is hitching on another wave of high-tech industries to add value to the economy and boost its digitalisation ambition.

The latest tie-up between YTL Corp Bhd’s utility unit YTL Power International Bhd and US technology giant Nvidia Corp in artificial intelligence (AI) venture may attract more global firms to set up or bolster their presence here, economists said.

They said the YTL-Nvidia tandem’s planned establishment of a supercomputing facility in Johor is poised to attract foreign enterprises seeking to establish research and development operations, particularly in computationally intensive fields like aerospace and pharmaceuticals, besides AI.

The move is expected to elevate Malaysia’s international standing, given Nvidia’s renowned presence in the global AI landscape.

Nvidia, a US$1.12 trillion company listed on the US’ Nasdaq, is behind computing technology of generative artificial intelligence such as ChatGPT.

Sunway University economics professor Dr Yeah Kim Leng said the tie-up augurs well for Malaysia’s foray into AI and related products and services.

“As a global leader in AI, Nvidia’s entry into the country’s foreign direct investment (FDI) landscape is also a signal of confidence in Malaysia’s growth prospects as well as the nation’s digitalisation ambition and potential,” Yeah told Business Times.

Malaysia, with its supportive government policies and an established technology manufacturing supply chain, is well-prepared to become an AI manufacturing hub, according to Tradeview Capital fund manager Neoh Jia Man.

“Malaysia has good roads, lots of clean energy and plenty of water that are really important for running big computer places like data centres and supercomputers.

“If the people here get better at doing computer stuff, Malaysia can use all these good things to build more data centers and supercomputers. This will help the AI industry grow in our country,” Neoh added.

Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun said after becoming a crucial part of the worldwide electronics supply chain, the nation is now joining a new wave of high-tech industries.

He said for Malaysia to become an AI manufacturing hub, the government policies must be streamlined to enable the relevant investors to set up shop in Malaysia. Otherwise, they will go to some of its competitive neighbours.

Malaysia must also focus on Science, Technology, Engineering and Mathematics (STEM) education and vocational training, added Oh.

On the potential economic impact anticipated from the Nvidia-YTL alliance and how it might influence Malaysia’s overall economic landscape, Oh is hopeful that the collaboration will create a high-paying job and qualitatively change the country’s economy.

“Hopefully Malaysia would gravitate further from raw-material exporting to high-tech manufacturing as the mainstay of the economy,” he added.

On the other hand, Yeah said the direct economic impact includes the capital invested by both joint venture partners that makes up the aggregate private investment component of gross domestic product.

“The more important indirect effects cover the impetus given to the deployment of AI in accelerating the country’s digital transformation,” he added.

Neoh, meanwhile, does not see much direct economic impact in the near-term nor he thinks that the project alone will alter Malaysia’s overall economic landscape as details on the tie-up are scant at present.

On Dec 8, YTL made an announcement about teaming up with Nvidia to create a powerful AI system in Malaysia.

This collaboration aims to bring supercomputers to the country by the middle of 2024.

The AI system will be located in the YTL Green Data Centre Park in Kulai, Johor, a massive facility generating 500MW of power, with the distinctive feature of being entirely powered by on-site solar energy.

YTL Communications Sdn Bhd, which is YTL’s telecommunications arm, will be responsible for owning and overseeing the AI infrastructure.

This infrastructure is designed to offer AI computing services across the nation, laying the groundwork for scientific research and the creation of solutions and applications.

Ultimately, this initiative aims to propel Malaysia forward on its journey to becoming an AI-driven nation.

Nvidia chief executive officer Jensen Huang, during his visit to Malaysia last week, said Southeast Asia has a strong potential market.

Source: NST

Malaysia can tap Nvidia-YTL tie-up to attract more global firms


Content Type:

Duration:

DRB-Hicom Bhd has entered into an agreement to form a joint-venture (JV) company with China’s auto giant Zhejiang Geely Holding Group Co Ltd for the overall operation and management of the development and construction of the Automotive Hi-Tech Valley (AHTV) project in Tanjung Malim, Perak.

In a statement on Monday (Dec 11), DRB-Hicom said it will hold a 50.1% stake in the JV company, while its Chinese partner Geely Holding will hold the remaining stake.

According to DRB-Hicom, the JV agreement outlines the key principles of the strategic collaboration, alignment on objectives, and terms of the partnership.

“A JV company will leverage on the respective strengths and expertise of DRB-Hicom and Geely Holding in establishing AHTV as the international next generation vehicle hub in Malaysia.

AHTV will encompass extensive automotive and mobility solutions across the value chain, from a full-fledged high technology global research and development centre, to world-class automotive original equipment manufacturers and manufacturing clusters,” it said.

The diversified group added that it would support services within an associated ecosystem, such as logistics, training and learning institutions within a smart city for the automotive industry.

Prime Minister Datuk Seri Anwar Ibrahim, who witnessed the exchange of documents earlier on Monday, said the government is committed to providing the relevant and required support for the AHTV development that is being actively carried out by Geely Holding and DRB-Hicom.

In a post on social media platform X (formerly Twitter), Anwar, who also had at a discussion in the morning with Geely Holding chairman Eric Li, said he emphasised that investments made in Malaysia must bring benefits to local talents and businesses.

“Geely shared that among the draws that drove them to invest in this country is the benefits from Malaysia’s trade relations with countries such as the US and European Union, in addition to its shareholding in Proton,” the prime minister said.

DRB-Hicom group managing director Tan Sri Syed Faisal Albar signed the JV agreement on behalf of DRB-Hicom while Geely Holding was represented by its chief executive officer Daniel Li.

Also present were Eric Li and Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz.

To recap, DRB-Hicom and Geely Holding had in April signed a heads of agreement to develop the AHTV as the next-generation vehicle hub in Malaysia, during the Malaysia-China Business Forum in Beijing.

The 1,000-acre AHTV is estimated to receive a massive US$10 billion (RM46.8 billion) investment from Geely, as it aims to turn Tanjung Malim into the largest auto city in the region.

According to media reports, the AHTV is expected to attract some RM32 billion worth of investments over the next 10 years, along with direct and indirect bene­fits from national car company Proton Holdings Bhd’s plan to fully relocate its manufacturing facilities to Tanjung Malim by 2026.

Proton, in which Geely owns a 49.9% stake while DRB-Hicom holds the remaining 50.1%, currently produces five models in the AHTV and another two models in Shah Alam, Selangor.

Shares in DRB-Hicom finished unchanged at RM1.37, giving it a market capitalisation of RM2.65 billion. Year to date, the stock has fallen by 17.5%.

Source: The Edge Malaysia

DRB-Hicom, Geely form JV to develop Automotive Hi-Tech Valley project


Content Type:

Duration:

AT the epicentre of Kuala Lumpur (KL), the 28.3ha Tun Razak Exchange (TRX) mirrors Malaysia’s ambitious vision for the future of international finance and business.

TRX aims to serve as an investment catalyst by attracting global financial players to establish their business and presence within the country.

Speaking with StarBiz7, TRX City Sdn Bhd chief executive officer Datuk Azmar Talib says the concept underlying TRX is to create a vibrant financial district in KL, not necessarily to compete with Singapore and Hong Kong, but to complement these more established financial districts.

TRX offers resilient physical infrastructure for the future of the financial ecosystem, capable of supporting the government’s initiatives to promote the financial services industry. This includes provisions for both Islamic and conventional finance, as well as catering to the needs of the international finance and fintech sectors.

TRX is envisioned as an international financial centre (IFC) that is lively beyond office hours.

It is also designed as a transit-oriented development with the only MRT interchange station in the city for the Kajang and Putrajaya lines.

The lifestyle section of the district, referred to as The Exchange TRX, welcomed the public on Nov 29, along with the TRX City Park. This area features a variety of food and beverage establishments, retail outlets, entertainment options, and a 4.04ha rooftop park designed to reconnect with nature.

The first phase of the project was completed in 2019, with the opening of Menara Prudential, which is home to Prudential Malaysia’s new headquarters and The Exchange 106. The latter is an iconic office building that was uniquely designed for rent and lease purposes. In 2022, HSBC Malaysia and Affin Bank opened their new headquarters in TRX.

Tech tenants in Exchange 106 at TRX include Huawei regional office, Accenture, Agoda and a host of financial services firms.

Among the financial entities are digital banks and fintech companies like UnionPay and MoneyLion.

Upon reaching full development, TRX envisions accommodating 40,000 knowledge workers, as well as hosting 12,000 residents and over 10,000 retail workers within the district.

A decade ago, TRX’s planning was marked by a significant emphasis on sustainability considerations.

Azmar says the district is on track to meet its net zero goal by 2030. All the office buildings in TRX are minimum gold certified by either GBI or LEED.

Owing to its district-wide sustainable features such as the world-class public realm and the dedicated on-site wastewater treatment and recycling plan, TRX is the first in South-East Asia to receive LEED Neighbourhood Development Gold Pre-certified Plan. The wastewater treatment and recycling plant reduces potable water demand by 50% by recycling at least 80% of used water on site. The treated water is used for cooling, irrigation and flushing.

“TRX is a sustainable IFC where people can work, play, and live comfortably.

“It is for both business and leisure. We have a mall, residential areas, and a park that redefines the public realm for Kuala Lumpur.

“TRX offers a unique blend of concrete and green spaces, catering to various needs, all centred around providing a high level of service and ease of doing business,” Azmar adds.

Source: The Star

Thriving global hub for finance


Content Type:

Duration:

Sarawak’s huge potential in renewable energy (RE) resources has attracted more international collaborations toward its development – the latest from United Arab Emirates’ (UAE) state- owned RE company Masdar.

Masdar, is one of the world’s largest RE companies with over US$30bil investment commitment in projects worldwide.

It has teamed up with Sarawak Energy Bhd (SEB) to work on the development of clean energy in Sarawak via an deal inked by both parties on the sideline of the 28th United Nations climate change conference (COP 28) in Dubai last week.

The signatories of the memorandum of understanding were SEB group chief executive officer Datuk Sharbini Suhaili and Masdar chief executive officer Mohamed Jameel Al Ramahi, witnessed by Sarawak Premier Tan Sri Abang Johari Tun Openg.

Earlier, Abang Johari and his deputy Datuk Amar Awang Tengah Ali Hassan were briefed on Masdar’s investment prospects in Sarawak in line with the state’s quest to be a regional hub for clean energy in the South-East Asia.

Masdar, which has its presence in more than 40 countries, is also a green hydrogen leader that has placed the UAE in the forefront of the energy transition.

Sarawak, which has huge hydropower resources to generate up to 20,000MW, is embarking on two hydrogen plant projects in Bintulu.

Also at COP 28, SEB has entered into a memorandum of collaboration (MoC) with Bursa Carbon Exchange (BCX), Hydropower Sustainability Alliance and the Netherlands’ I-REC Standard Foundation to pave the way for offering renewable energy certificates (RECs) on BCX, a wholly-owned subsidiary of Bursa Malaysia Bhd and Malaysia’s voluntary carbon market exchange.

The MoC, according to SEB, will explore the potential supply of RECs from SEB, facilitate cross-border RECs trading and international attribute tracking standards for RECs using the I-REC platform, raise awareness through joint knowledge-building sessions on sustainability certifcation such as hydropower sustainability standard and understanding credible renewable energy claims.

The MoC will also help to promote the use of sustainability certifications in conjunction with RECs, such as by layering the hydropower sustainability standard onto the I-RECs’ international attribute tracking standard, to help end-users identify and purchase premium hydropower RECs from BCX.Given the increasing awareness and commitment to sustainability among corporates in South-East Asia, Sharbini of SEB said: “REC plays a key role in ensuring a credible mechanism for tracking RE consumption and supporting the global transition towards a low-carbon economy.

“Since our REC launch in 2019 during our inaugural Sustainability and Renewable Energy forum in Kuching, SEB has supported various players from different industries in their sustainability journey through the REC mechanism.”

The signing of the MoC will empower all stakeholders by promoting awareness of RE and sustainability, while reinforcing Sarawak’s hydropower as an essential source of renewable and sustainable energy in Malaysia, he added.

Meanwhile, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said by adding RECs to BCX’s existing portfolio of high-quality carbon credits, it aims to provide more options and flexibility for its customers to access and trade environmental products.

“Our partners and BCX have formalised this collaboration to promote the trading of hydropower RECs on BCX, which are targeted to be launched next year.

“We are honoured to have SEB sign this MoC with us, given that it is a significant renewable energy supplier in Malaysia. We applaud SEB’s commitment to obtain hydropower sustainability standard certification for all its hydropower plants,” said Muhamad Umar.

According to him, BCX plans to offer RECs from projects with the I-REC Standard.

In another related development at the COP28, Invest Sarawak Sdn Bhd entered into a MoU with Surbana Jurong Pte Ltd.

The cooperation and partnership with the Singapore-based urban, infrastructure and managed service consulting firm was to deepen the energy transition, transformation and decarbonisation initiatives in Sarawak.

The key aims include identifying challenges and opportunities for Sarawak’s industrial landscape.

This would comprise green economic potentials via enhancing and developing skillsets of Sarawakians for new opportunities as well as implementation of energy transition and industrial decarbonisation projects integrated with greeenfield and brownfield industrial activities.

Surbana Jurong has completed the masterplan for the development of industrial terminals in Sarawak for the state government.Abang Johari, who witnessed the MoU signing, said Sarawak is focusing on promoting low carbon solutions, green and circular economy.

He noted Sarawak became the first state in Malaysia to pass a law on carbon emissions – the Environment (Reducation of Greenhouse Gas Emission) Bill 2023 last month.

It is designed to safeguard Sarawak’s environment by implementing concrete strategies to reduce the emissions of greenhouse gases.

“It will also help to promote carbon capture and storage that will help mitigate the impact of climate change while providing a platform for Sarawakians to participate in carbon mitigation projects that will earn carbon credits for their efforts.

“All the other efforts in progress such as green hydrogen, micro-algae,sustainable aviation fuel and also biomass projects in Sarawak are done with the view of a better future Sarawak and the planet,” added Abang Johari.

Source: The Star

Magnet for RE resources


Content Type:

Duration:

Intel has been at the forefront of chip manufacturing and contributed to the semiconductor boom worldwide. It ventured into Penang in 1971 and established itself as a leader in the semiconductor industry. But things have changed.

With manufacturers such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) joining the semiconductor race, competition has increased, and more companies are fighting for a slice of the pie. TSMC has leapfrogged Intel as the world’s largest chipmaker.

To regain market share, Intel has adopted the foundry model, which was introduced in 2021 and has seen massive investments. Intel Foundry Services (IFS) offers a wide range of manufacturing services, including sort-and-test capabilities, and is a critical element of the IDM 2.0 strategy.

This strategy is executed through its internal factory network, external foundries and the Intel foundry.

“We are going beyond the traditional foundry offerings and building IFS as one of the world’s first open system foundries, leading the industry transition from standard monolithic system-on-chip to ‘systems of chips’ in a package,” says Intel Malaysia managing director A K Chong.

“Our combined offerings of wafer fabrication, advanced process, packaging technology, chiplet standards, software, robust ecosystems, and assembly-and-test capabilities will help our customers build innovative silicon designs and deliver full end-to-end customisable products.”

In December 2021, Intel CEO Pat Gelsinger announced an investment of more than US$7 billion to increase manufacturing capacity in Malaysia. Two new key facilities are being constructed: an assembly plant in Kulim and an advanced packaging facility in Penang. This means Malaysia has a role to play in enabling Intel’s foundry model.

Malaysia’s two facilities have more than two million square feet of manufacturing space and can provide functions such as advanced packaging, die prep and sort, assembly and test, board and system integration, product design and product development.

Intel’s facilities in Malaysia are the Kulim Die Sort Die Prep (KMDSDP) factory, Penang Assembly Test (PGAT) factory, Kulim Assembly Test factory and System Integration and Manufacturing Services (SIMS) factory. Two other factories, Pelican and Falcon, are under construction.

The Intel KMDSDP factory receives silicon wafers from fab plants and performs die preparation processes. The factory then sorts them for package assembly and test at Intel assembly-and-test facilities globally. The Intel SIMS factory is a manufacturing and tester integration factory that manufactures equipment to test and validate silicon during its production at Intel facilities and labs.

The Intel PGAT factory is a high-volume manufacturing facility that produces chips by the millions. There are six key stages at this factory: chip attach; epoxy and lid attach for assembly; burn-in; test; and platform performance validation tests. The assembled chips are put through a series of temperature, stress, performance and quality tests before being sent to customers.

“With this additional investment, we would have invested a total of US$14 billion in Malaysia by 2032,” says Chong.

“The new facilities in Malaysia are part of our investments in manufacturing capacity to support the expansion of our internal factory network and our system foundry model. The new assembly-and-test factory in Kulim further extends our current capabilities and it will be operationally similar to existing factories in Penang and Kulim.

IFS offers a wide range of manufacturing services, including sort-and-test capabilities. “In the new internal foundry model, based on internal volume, we expect to be the second-largest foundry next year, with manufacturing revenues greater than US$20 billion [RM93.4 billion],” adds Chong.

The clients that Intel are working with through the foundry model include Mediatek, Amazon Web Services (AWS), Qualcomm, ARM and Tower Semiconductor.

Intel and Mediatek announced a strategic partnership in 2022 to manufacture chips using IFS advanced process technologies. Meanwhile, AWS is the first to use IFS’ packaging solution. In April 2023, Intel and ARM announced a multigeneration agreement to enable chip designers to build low-power compute system-on-chips (SoCs) on the Intel 18A process.

“The collaboration will focus on mobile SoC designs first, but allows for potential design expansion into automotive, Internet of Things, data centres, aerospace and government applications,” says Chong.

Tower Semiconductor and IFS announced an agreement whereby Intel will provide foundry services and 300mm manufacturing capacity to help Tower serve its customers globally.

Power of AI

Intel has also pledged to integrate artificial intelligence (AI) into all its platforms. AI has permeated its way into societies, companies and countries. Intel’s software platforms and heterogeneous architectures, which consist of central processing units (CPUs), graphics processing units (GPUs) and deep-learning accelerators, make it easier for customers to deploy AI.

The new Meteor Lake, a consumer chip expected to be launched in December, is expected to be a true entry of AI experience into the client PC. This will be done through a dedicated neural AI engine, which is called a neural processing unit (NPU), on Intel client processors.

The new experiences enabled by Meteor Lake include improved performance parallelism and throughput on the GPU tile. This is ideal for media and rendering workloads that can take advantage of AI. Furthermore, the new dedicated low-power AI engine on the NPU provides dedicated compute power for sustained AI workloads and offloading. 

“AI as a workload needs to be accessible and part of every application. In this way, we will provide choice and compatibility across architectures, vendors and cloud platforms in support of an open, accelerated computing ecosystem,” says Chong.

Source: The Edge Malaysia

Hardware: Navigating the changing semiconductor landscape


Content Type:

Duration:

wpChatIcon