Nurturing Malaysia’s Semiconductor Industry:Addressing Talent Challenges for Sustainable Growth

Malaysia’s foray into the semiconductor industry began in the 1970s, driven by ambitious government initiatives aimed at diversifying the economy. Over the decades, the nation’s semiconductor industry stands at the forefront of economic transformation, poised to become a global powerhouse. With its strong presence in chip assembly, packaging, testing, and electronics manufacturing services, Malaysia has become a key player in the global semiconductor market.

As the semiconductor landscape evolves, fuelled by advancements in artificial intelligence, the Internet of Things, and 5G technologies, the demand for skilled professionals continues to escalate. Engineers proficient in fields such as semiconductor design, fabrication, and testing are indispensable for driving innovation and maintaining Malaysia’s competitive edge in the global market. While the country boasts a considerable number of engineers and technicians, the allure of higher salaries and opportunities abroad often lures talented professionals away from the domestic market. This trend can pose challenges to talent retention efforts, impacting Malaysia’s ability to fully leverage its promising prospects.

Moreover, many Malaysian companies, particularly small and medium enterprises, rely heavily on unskilled foreign labour and are hesitant to embrace automation. This reluctance stems from perceived limitations in developing automated machinery and precision tools that match the standards of countries such as Germany or Japan.

To address these challenges and propel the semiconductor industry forward, Malaysia must prioritise STEM education and technical training. By investing in talent development from schools to universities, as well as vocational institutions, Malaysia can cultivate a robust pipeline of skilled workers essential for the industry’s growth.

The New Industrial Master Plan (NIMP) 2030 aims to elevate the semiconductor industry by doubling the manufacturing median wage from RM2,205 per month in 2022 to RM4,510 per month by 2030 and improving pay for skilled workers. This initiative recognises that addressing salary issues is crucial in attracting and retaining talent, ultimately driving industry advancement.

Furthermore, Malaysia must take a proactive approach in shaping its semiconductor ecosystem through policy leadership and strategic collaboration. Establishing the National Semiconductor Strategic Task Force (NSSTF) signifies a commitment to nurturing the industry and attracting strategic investments. By engaging various stakeholders, including industry players, policymakers, and academia, Malaysia can position itself as a key player in the global semiconductor landscape.

By leveraging the collective expertise and resources of these stakeholders, Malaysia can foster an environment conducive to innovation and investment in the semiconductor sector. Through targeted policies and initiatives, the nation can position itself as a preferred destination for semiconductor manufacturing and R&D activities.

The Memorandum of Cooperation on Semiconductor Supply Chain Resilience between Malaysia and the United States underscores the importance of international collaboration in addressing global challenges facing the semiconductor industry. By fostering partnerships and alliances, Malaysia can enhance its competitiveness and resilience in the face of evolving geopolitical dynamics.

In conclusion, Malaysia’s semiconductor industry holds immense promise as a catalyst for economic growth and technological advancement. By addressing talent shortages, enhancing wage structures, and fostering strategic collaboration, Malaysia can unlock its full potential as a leading player in the global semiconductor landscape. With concerted efforts and decisive action, Malaysia can chart a path towards sustainable growth and prosperity in the semiconductor industry.

For more information, please get in touch with the MIDA Electrical and Electronics Division at https://www.mida.gov.my/staffdirectory/electrical-electronics-division/.