GEORGE TOWN – Despite disruptions in the manufacturing sector due to the Covid-19 pandemic, global demand for electrical and electronic (E&E) products has increased tenfold as the world increasingly relies on digitalisation.
In light of this, Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai hopes that the authorities understand the need to be supportive of E&E clusters to help the manufacturing sector rebound.
He said Penang, where many E&E manufacturers are located, can regain its export momentum to furnish the global market with an adequate supply of the latest E&E devices and chips, notwithstanding the delays caused by virus lockdowns and workplace infections.
Of late, the state has encountered setbacks on the economic front after it became mired in the health crisis, with rising infections and deaths.
Despite this, Wong told The Vibes, Penang remains resilient in E&E.
In tandem with the high vaccination rate, production should rise to 80% of the sector’s capacity this month, he said.
“Yes, I should say we are a critical part of the global supply chain.”
Penang and its neighbouring industrial areas in Kulim form a global base for manufacturing semiconductors and related operations, such as wafer fabrication, assembly testing, integrated circuits and packaging.
A good degree of research and development is also done here.
While acknowledging that operating costs have gone up due to health and safety standard operating procedures for factories, Wong said operators and business owners can cope if there is an all-out effort to cut virus transmissions at the workplace.
He said the sector, which has a collective capital expenditure of RM4 billion, now needs up to 10,000 new workers. Of these, some 2,000 positions are for engineers.
Last year, the sector contributed 64% to the nation’s gross domestic product valued at RM86.1 billion, while from 2016 to 2020, the industry grew 5.6% per annum, slightly higher than the manufacturing sector’s growth of 3.3% per annum.
The federal government has set a target for it to contribute RM120 billion to GDP and generate RM495 billion in export earnings by 2025.
Under the 12th Malaysia Plan (12MP), E&E industry players are encouraged to adopt advanced technologies and produce more sophisticated products, resulting in higher productivity and growth.
Meanwhile, Datuk Seri Lee Kah Choon, special investment adviser to the Penang chief minister, said the state should seize the opportunities emerging in view of the reshuffling of the global supply chain.
He said the pandemic has accelerated the reset due to the disruption in the traditional supply chain of E&E components.
As a result, alternative sources are being explored.
“This is where Penang may benefit if it seizes the opportunities,” said Lee.
It was reported that global demand for chips from Malaysia still outstrips supply, despite the earlier surge in Covid-19 cases that disrupted production.
Malaysian-made chips are installed in cars, smartphones and medical equipment, among other products. – The Vibes, October 11, 2021
