Premier says move will draw investments, see GDP growth

Sarawak has set its sights on establishing itself as a semiconductor highvalue-added hub in Southeast Asia by 2030, Datuk Patinggi Tan Sri Abang Johari Tun Openg said.

The Premier said collaborations with United Kingdom companies strategically align with this aspiration which would lead to an increase in investments and the state’s gross domestic product.

Towards realising this, he said Sarawak will unveil its Holistic Sustainability and Circular Economy Strategy by the end of this year to solidify state-owned SMD Semiconductor Sdn Bhd’s position globally and establish new industry standards in sustainable business practices.

“I recently witnessed the exchange of a Memorandum of Understanding (MoU) between SMD Semiconductor and Compound Semiconductor Application Catapult at the House of Commons in the UK to promote collaboration in the development of advanced semiconductor chips.

“SMD Semiconductor will be setting up a research and development office in the United Kingdom to facilitate its research and commercialisation activities.

“The areas of cooperation and collaboration include the development of new compound semiconductor chips tailored for automotive and space applications,” he said when launching SMD Semiconductor’s chip design centre and academy at La Promenade Mall here yesterday.

He said the MoU also entails talent development initiatives encompassing academic, industry and governmental partnerships spanning the UK, Malaysia and Sarawak in particular, to nurture skilled professionals in the semiconductor sector.

He added that SMD Semiconductor has been granted a 10-acre plot in Samajaya Free Industrial Zone to expand its semiconductor operations, addressing the increasing importance of advanced chip packaging technologies for highperformance semiconductor chips.

“For Sarawak to participate and capture the attention of global industry leaders, SMD Semiconductor must position itself in a region with abundant expertise, vibrant innovation and a substantial market presence.

“It is crucial for the company to assemble a team of extraordinary individuals and top-tier engineers for the development of advanced semiconductor technologies,” he said.

He added that he was supportive of SMD Semiconductor working with i-CATS University College in introducing aerospace modules into the curriculum to pave the way for students to advance their career in the high-tech aerospace industry.

“I hope SMD Semiconductor can collaborate with private partners and collaborate on the research and the development of a Sarawakowned chip to be incorporated into satellites.

“The collaboration will advance our semiconductor technology and significantly elevate Sarawak’s capabilities,” he said.

Meanwhile, Education, Innovation and Talent Development Minister Dato Sri Roland Sagah Wee Inn said a batch of 15 trainees will conclude their six-month training programme next month as part of a collaboration between SMD Semiconductor and the Centre for Technology Excellence Sarawak (Centexs).

The trainees would then be employed by SMD Semiconductor and its partners with a starting salary of RM4,000 per month, he said.

Sagah highlighted that SMD Semiconductor has grown from just three engineers to its current workforce of 30 engineers, and it is projected to reach 50 engineers by this year-end.

Following the launch of the chip design centre, SMD Semiconductor and the Land and Survey Department inked an MoU for the development of an electronic tracking embedded system.

According to Abang Johari, this collaboration has the potential to drive innovative solutions in various applications, including land marking, land area calculation, slope detection and geo-positioning.

Among those present yesterday were Deputy Premier Datuk Amar Awang Tengah Ali Hasan, SMD Semiconductor chief executive officer Shariman Jamil, and Land and Survey Department director Awang Zamhari Awang Mahmood.

It is crucial… to assemble a team of extraordinary individuals and top-tier engineers for the development of advanced semiconductor technologies.

Source: Borneo Post

Positioning Sarawak as semiconductor hub

The initiative to elevate production up the value chain will position Malaysia at the forefront of the semiconductor industry, said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz.

He said this move presents an opportunity for Malaysia to play a pivotal role in the global supply chain, especially amid the trade tensions between the US and China as companies are reconfiguring their supply chains.

“The semiconductor industry significantly influences the global supply chain. We have observed the realignment and redefinition of supply chains.

“As companies strive to become more competitive and secure their supply lines, the semiconductor industry is poised for continued growth,“ he said at the Bursa Malaysia-Hong Leong Investment Bank Stratum Focus Series XVII on “Semicon: Light at the End of the Tunnel?” today.

Tengku Zafrul said Malaysia can and will leverage its mature industrial infrastructure with good connectivity, rule of law, strategic location and ease of doing business to further integrate ourselves into the global semiconductor value chain.

”This is a crucial moment for Malaysia, and we must seize this moment to ensure resilience and growth in our electrical and electronics sector,” he said.

Furthermore, he said, transitioning to advanced packaging in the semiconductor industry demands substantial capital expenditure, which poses a challenge given the current fiscal constraints.

The move, while promising for technological advancement, would necessitate significant government support and fiscal backing.

“Advanced packaging requires very high capex, so this will also likely require a lot of support, which we may not have the fiscal space at this point in time. Hence, we need to be aggressive, but we need to be at the same time using our competitive advantage,” he said.

The Asia-Pacific semiconductor market size was estimated at almost US$288 billion in 2023 and is forecast to reach US$612 billion by 2033, growing at a compound annual growth rate of 7.83% from 2024 to 2033.

The global semiconductor industry is expected to reach US$1 trillion by 2030.

Tengku Zafrul said the government is confident with the strong foundation in the semiconductor industry, Malaysia can be a true semiconductor powerhouse not just in assembly, but also in innovation and design.

At a separate function today, Tengku Zafrul commented that Google’s latest investment highlights Malaysia’s competitiveness, ease of doing business and growing importance as a regional hub for digital innovation.

He said the investment recognises the nation’s potential to lead the region’s digital economy.

“This is particularly pertinent as Malaysia intends to strongly promote the digital economy regionally when we take up the Asean chairmanship next year.

“Google’s presence will not only create thousands of high-skilled jobs but also accelerate the digital transformation of our businesses and public sector, strengthening our tech leadership and supporting Malaysia’s positioning as a tech hub in Southeast Asia,” he said at Google Cloud Malaysia Day.

Tengku Zafrul said this investment serves as a strong foundation for Malaysia to embrace the cloud as a springboard for its operations and business innovation, unlocking opportunities and contributing to the growth and prosperity of the Malaysian economy.

He said digitalisation and artificial intelligence (AI), among others, are key to shaping a sustainable and inclusive socio-economic future, and the cloud is our gateway to that promising horizon.

He added that the Madani government recognises the transformative power of digitalisation, cloud computing and AI, making them key drivers in our economic roadmaps, such as the New Industrial Master Plan 2030 (NIMP 2030).

“We understand that investing in cloud infrastructure and fostering a digital-first mindset is essential for creating a sustainable and prosperous future for our nation,” he said.

Tengku Zafrul said the positive and deep impact of cloud technologies on the Malaysian economy is clear.

It boosts productivity and creates high-skilled jobs, he added.

Malaysia has seen a surge in efficiency and innovation as industries leverage cloud-based solutions to streamline operations, automate tasks and gain valuable insights from data.

The manufacturing sector, in particular, has embraced cloud-enabled technologies to optimise supply chains, monitor equipment performance and improve production efficiency.

“The healthcare industry has also seen significant benefits, with hospitals leveraging cloud technology to improve patient care, manage electronic medical records and facilitate telemedicine services.

“These advancements not only drive productivity by leveraging data-driven insights but also create demand for high-skilled professionals in areas like data analytics, software development and cloud architecture,” said Tengku Zafrul. 

Source: Bernama

Initiative to move up value chain will put Malaysia at forefront of semicon industry: Tengku Zafrul

TWO ministries are set to hold discussions to enhance the logistics infrastructure, particularly at airports, to support the export movements of the semiconductor industry.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said his ministry and the Transport Ministry will explore ways to do so, with air transport being key to the industry.

“About 90% of semiconductor exports are transported via air, but land transport is still necessary to reach the airports,” he said.

Citing Penang’s airport for the challenges it faces in this sector, he said: “Some airlines have indicated their willingness to send Boeing 777 aircraft. Unfortunately, at the moment, the 777 cannot land in Penang in terms of cargo capacity.”

Tengku Zafrul also said there are plans for other airports, including Kuala Lumpur International Airport and Johor’s Senai Airport.

“There are proposals to expand our airports such as in Senai. We will also discuss this with the Transport Minister because, under the National Semiconductor Strategy (NSS), logistics is a crucial issue that we need to address,” he told the Dewan Rakyat yesterday.

He was responding to a question from Paya Besar MP Datuk Mohd Shahar Abdullah of Barisan Nasional, about Malaysia’s reliance on air cargo for semiconductor exports compared with railway logistics, given that 95% of semiconductor exports in Malaysia rely on air cargo.

Tengku Zafrul said Singapore has a significant advantage due to its more efficient infrastructure, especially in high-tech sectors.

He said global political tensions, such as the United States-china trade war and the Russia-ukraine crisis, have had an impact on Malaysia’s semiconductor industry.

“These conflicts indirectly affect our semiconductor industry. However, they also present opportunities for Asean and Malaysia as multinational companies diversify their locations,” he added.

Tengku Zafrul noted that companies like Intel and Globalfoundries have invested in Malaysia to diversify their supply chains.

“Other companies in the E&E (electrical and electronics) sector like Texas Instruments, Ericsson and Bosch are also diversifying their supply chains here,” he added.

He said the government is committed to ensuring continued investments in the E&E industry and to introducing the NSS, which outlines Malaysia’s plans to become a major semiconductor hub over the next 10 years.

Prime Minister Datuk Seri Anwar Ibrahim has said that under the NSS launched in April, Putrajaya aims to establish at least 10 Malaysian companies in design and advanced packaging, each generating revenue of between Rm1bil and Rm4.7bil.

He also said Malaysia intends to attract Rm500bil in investments for integrated circuit design, advanced packaging and manufacturing equipment for semiconductor chips.

Source: The Star

Govt to boost chips export logistics

Ann Joo Resources Bhd’s recent contract win for the design and construction of electrification works for the East Coast Rail Link (ECRL) feeder stations is seen as a positive step, as it marks Ann Joo’s entry into the utility-infrastructure sector.

TA Research, which views the job win positively, said this move marks Ann Joo’s first step into vertical expansion, which would complement its existing core operations.

“Ann Joo is on the verge of entering the utility-infrastructure sector to capitalise on the increasing demand for electricity, driven by robust population growth and rising foreign direct investment in the data centre industry,” the research house noted.

Last week, Ann Joo, together with its partner PT Lumintu Insan Mandiri, secured a contract valued at Rm297.9mil from Tenaga Switchgear Sdn Bhd, a subsidiary of Tenaga Nasional Bhd (TNB).

Key components of the project include a 132 kilovolt switching station, overhead transmission lines, underground cable installation and associated work for the ECRL feeder stations.

The project is expected to be completed by May 31, 2026.

TA Research highlighted that partnering with PT Lumintu, an Indonesiabased company specialising in engineering, procurement and project management services, will enable Ann Joo to expedite its diversification process and better position itself for domestic utility-infrastructure projects.

The research firm believes Ann Joo’s venture into the sector aligns well with TNB’S indicative capital expenditure of about Rm15bil annually for upgrading the country’s power grid, as outlined in the New Energy Transition Roadmap (NETR).

“This development will stimulate demand for steel products, as more steel-based wiring and cabling will be required to support the grid upgrades,” it added.

Last month, Ann Joo Steel Bhd, a subsidiary of Ann Joo Resources, and Solarvest Holdings Bhd, a leading clean-energy expert, successfully completed the installation of a 3.3 megawatt-peak rooftop solar photovoltaic system at AJS’ manufacturing plant in Seberang Perai, Penang.

TA Research said the partnership leverages PT Lumintu’s construction expertise and allows Ann Joo to internalise its steel supply chain, thereby strengthening its market position.

Despite the positive outlook, TA Research has maintained their earnings forecasts, pending further details on the consortium’s shareholding structure.

Following the recent contract win, TA Research revised its target price-to-earnings ratio from 11 times to 12 times, resulting in a new target price of RM1.64 a share.

The research house said it believes the valuation is fair, considering Ann Joo’s potential as a key supplier of steel materials for the Penang light rail transport project, supported by its cost competitiveness from its steel-making plant in Prai, Penang.

Moreover, it said the increasing construction activity, due to the revitalisation of the property sector, is driving higher demand for steel products.

Additionally, the upgrading of the power grid, in line with the government’s energy goals, further boosts demand for steel.

Source: The Star

Positive views on Ann Joo’s expansion into infrastructure

The government will implement measures to bolster airport infrastructure supporting the country’s semiconductor exports in order to achieve the aspirations of the National Semiconductor Strategy.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said his ministry (MITI) will discuss the issue with the Ministry of Transport (MOT) soon.

He said that 90 per cent of the country’s exports are supported by air transportation.

“Exports to foreign countries via Singapore are quite large as they have an efficient infrastructure, especially for this high-tech sector.

“In Penang, there was an airline willing to use a 777 cargo plane, but unfortunately, the plane could not land there. There are also suggestions for us to expand our airport in Senai, Johor,” he said during the question and answer session at the Dewan Rakyat today.

Similarly, he said the government would also harness land transportation, especially the East Coast Rail Link project, which will be a catalyst for economic and industrial development in the states of the East Coast region.

“The government, via the Malaysian Investment Development Authority, always takes proactive measures in an effort to attract foreign and local investments in various sectors into any state in Malaysia,” he explained.

Tengku Zafrul said that the Kelantan state government has given excellent support in ensuring that the electrical and electronic industry grows in the state, for example, through the presence of Rohm Wako Electronics (Malaysia) Sdn Bhd with an investment value of over RM1.7 billion.

The investment has created 2,000 job opportunities for the people, especially in the engineering, science and technical fields, he said.

He added that the government will always support and be open to working with the state governments in their respective development plans to grab the opportunities to attract quality investments, such as in the field of integrated circuit design.

Source: Bernama

MITI, MOT to mull bolstering airport infrastructure for semiconductor exports – Tengku Zafrul

NexV Manufacturing Sdn Bhd (NMSB) has signed two major memorandums with automotive stakeholders to manufacture and assemble electric vehicles locally.

This is a significant milestone since the company initiated its groundbreaking ceremony for the new energy vehicles (NEV) manufacturing plant in Chembong, Negeri Sembilan in January 2024.

NMSB chairman Datuk SM Azli SM Nasimuddin Kamal said the first is a memorandum of agreement (MoA) between NMSB and five Tier Zero (T0) vendors.

He said T0 vendors operate in a “factory within factory” concept whereby vendors responsible for a particular component (or system) set up their operations, manpower and management system, all within the larger ecosystem of the full manufacturing process flow to assemble each component to complete a vehicle.

“This novel concept enables a more efficient management of assembly processes and material flows,” he said.

The concept enables a company to procure materials and components in a just-in-time (JIT) management system with a minimal inventory rate for critical materials and components, he said at the signing ceremony between NMSB and local automotive stakeholders to develop a new manufacturing and assembly ecosystem.

The five T0 vendors are PHN Industry Sdn Bhd, Hicom Teck See Manufacturing Malaysia Sdn Bhd, Noble Star Parts Sdn Bhd, Evan Karl Holdings Sdn Bhd, and KNR Biz Solution Sdn Bhd.

“More T0 vendors will be appointed once we complete the second and third construction phases,” SM Azli said.

He said the T0 vendors will enhance the capability and technology of existing vendors.

“For instance, one vendor may have expertise in one component. They can enhance their expertise for the entire component system in the T0 vendor system.

“Hence, our success in the NEV factory is deeply intertwined with our collaboration with T0 vendors as they provide critical components and technologies that are the backbone of our NEV products,” he said.

NMSB also signed agreements with two distributors Central Auto Distributors Bhd, a subsidiary of the Association of Malay Importers and Traders of Motor Vehicles Malaysia or PEKEMA, and Wise Star
Assets Sdn Bhd, appointing NMSB as the contract assembler.

The aim of the MoU is for NMSB to assemble brands that include Dongfeng NEV and Skywell electric buses.

He added that in fostering industrial growth, NMSB is also partnering Institut Kemahiran Tinggi Negara Chembong to equip students with skills in NEV technology, ensuring a skilled workforce ready to drive the industry forward.

NMSB’s factory is located on 29.67 hectares (73.34 acres) in the Chembong Industrial Area in Rembau, Negeri Sembilan and is set to become a cornerstone of NexV’s operations.

Source: Bernama

NexV Manufacturing inks agreements on new energy vehicle manufacturing

Malaysia needs to move upstream both vertically and horizontally to move upstream, to grow its global share of semiconductor exports and market share, according to a policy paper by the Institute of Strategic & International Studies (ISIS) Malaysia.

Upstreaming vertically refers to advancing its assemby, testing and packaging capabilities.

For example, producing advanced packaging in the Outsourced Assembly and Testing (Osat) process.

Upstreaming horizontally refers to moving towards the front-end of the value chain, which includes integrated circuit (IC) design and wafer fabrication.

The policy paper entitled “Malaysia’s semiconductor ecosystem amid geopolitical flux”, authored by Farlina Said and Angeline Tan, said a fabless integrated device manufacturer could unlock the largest share of economic value, at 57 per cent, compared to Osat, which could be limited to 6 per cent of the value in the supply chain.

“This would articulate the appeal of upstreaming horizontally into activities like IC design, as articulated in the National Industrial Master Plan. However, increasing Malaysia’s capacity in this sector would require addressing issues, such as talent and building proficiencies for IC design,” the paper said.

Furthermore, as Malaysia already has a 13 per cent foothold in testing and packaging, growing this to advanced packaging would increase its participation in the global semiconductor industry.

The paper said Malaysia’s ATP capabilities are primarily on traditional back-end packaging and would benefit from upstreaming vertically towards higher-value opportunities.

“Currently, there are some advanced packaging capabilities being developed in Malaysia, such as through ASE Technology and Intel. Further targeted incentives are required, specifically for players to tap into capital and training necessary for upstreaming on this front. The government should facilitate greater investments to help gain momentum developing advanced ATP capacities,” it said.

It added that there is interest within Malaysia’s semiconductor industry to move towards advanced packaging. However there may be concerns over the geopolitical risk arising out of the US-China tech rivalry, which would necessitate a coordinated response from the Ministry of Investment, Trade and Industry  and Ministry of Foreign Affairs to mitigate the risks to the semiconductor industry.

While acknowledging that public-private partnerships are already present in grooming small medium enterprises to fit in larger manufacturing ecosystem, such as the Penang Automation Cluster in Batu Kwan Industrial Park, the paper said the cluster and park are focused on manufacturing with lesser emphasis on building research and development (R&D), innovation and business synergy.

In upstreaming horizontally, Malaysia should grow talent in integrated circuit (IC) design, which may require exploring knowledge-transfer, training and wage policies that could appeal to multi national companies (MNCs) and universities.

The policy paper said Malaysia also needs to consider investing in the capacity in existing facilities while enhancing its successes.

It said a targeted strategy that encompasses concrete milestones, talent pipelines, incentives and investments is necessary to chart the way forward.

Source: NST

‘Malaysia must move upstream vertically, horizontally to grow semiconductor exports’