Malaysia’s semiconductor sector is expected to experience significant growth starting in the second half of 2024, as the global economy enters a recovery phase after a downcycle in 2023. The World Semiconductor Trade Statistics (WSTS) predicts a rebound of 13.1% in the world semiconductor market this year, reaching a value of $588 billion. Despite a global decline of 8.2% in semiconductor sales in 2023, Malaysia managed to maintain its strength in the market.
The country’s electrical and electronics (E&E) sector, in particular, has demonstrated resilience. Although exports in the E&E sector decreased by only 3.0% in 2023, after a remarkable 30% growth in the previous year, the exports of semiconductor devices and integrated circuits (ICs) saw a slight increase of 0.03% to reach RM387.45 billion.
One contributing factor to Malaysia’s success in the semiconductor industry is the “China Plus One” strategy adopted by many multinational companies. As geopolitical tensions lead investors to seek new production sites or trusted markets, Malaysia has become an attractive “Plus One” location. Furthermore, the global push for supply chain resiliency has motivated firms to diversify their operations and reduce reliance on China.
The competition in the electric vehicle (EV) market has also spurred local automakers to boost production and offer more affordable models. The sales of EVs are projected to reach 14 million units by the end of 2023, reflecting a significant growth trajectory.
Moving forward, Malaysia has the potential to play a crucial role in the global semiconductor supply chain. As the sixth-largest exporter of semiconductors worldwide and the holder of 13% of the global market for packaging, assembly, and testing services, Malaysia possesses a strong position in the industry. To optimize its potential, collaboration among all stakeholders is essential. The improvement of Malaysia’s competitive ranking, ease of doing business, and the enhancement of the E&E ecosystem are crucial steps for the country.
Investments in state-of-the-art technology, the attraction of more wafer fabs, and the establishment of local and foreign direct investments in IC design companies are key recommendations to strengthen Malaysia’s semiconductor ecosystem. Additionally, the nation should focus on advancing packaging and assembly, testing capabilities, and nurturing Malaysian global champions in automation.
With its rich talent pool and decades of industry experience, Malaysia is well-positioned to thrive in the semiconductor sector. By capitalizing on emerging opportunities and fostering collaboration, Malaysia can contribute significantly to the global supply chain and bolster its own economic growth.
FAQ:
1. What is the current state of Malaysia’s semiconductor sector?
The article states that Malaysia’s semiconductor sector is expected to experience significant growth starting in the second half of 2024, following a downcycle in 2023. Despite a global decline in semiconductor sales, Malaysia managed to maintain its strength in the market.
2. What is the predicted rebound for the world semiconductor market in 2024?
The World Semiconductor Trade Statistics (WSTS) predicts a rebound of 13.1% in the world semiconductor market in 2024, reaching a value of $588 billion.
3. How did Malaysia’s electrical and electronics (E&E) sector perform in 2023?
In 2023, exports in Malaysia’s E&E sector decreased by only 3.0% after a remarkable 30% growth in the previous year. The exports of semiconductor devices and integrated circuits (ICs) saw a slight increase of 0.03% to reach RM387.45 billion.
4. What is the “China Plus One” strategy?
The “China Plus One” strategy is the adoption of new production sites or trusted markets by multinational companies, driven by geopolitical tensions and the need for supply chain resiliency.
5. How has the competition in the electric vehicle (EV) market affected Malaysia?
The competition in the EV market has spurred local automakers in Malaysia to boost production and offer more affordable models. The sales of EVs are projected to reach 14 million units by the end of 2023.
6. What is Malaysia’s role in the global semiconductor supply chain?
Malaysia is the sixth-largest exporter of semiconductors worldwide and holds 13% of the global market for packaging, assembly, and testing services. The country has the potential to play a crucial role in the global semiconductor supply chain.
7. What are some recommendations to strengthen Malaysia’s semiconductor ecosystem?
The article suggests that investments in state-of-the-art technology, attracting more wafer fabs, and establishing local and foreign direct investments in IC design companies are key recommendations to strengthen Malaysia’s semiconductor ecosystem. Additionally, focusing on advancing packaging and assembly and nurturing Malaysian global champions in automation is important.
8. How is Malaysia positioned to thrive in the semiconductor sector?
With its rich talent pool and decades of industry experience, Malaysia is well-positioned to thrive in the semiconductor sector. By capitalizing on emerging opportunities and fostering collaboration, Malaysia can contribute significantly to the global supply chain and bolster its own economic growth.
Definitions:
– Semiconductor: A material that has electrical conductivity between that of a conductor and an insulator. It is a key component in electronic devices.
– Electrical and Electronics (E&E) sector: Refers to the industry involved in the production of electrical and electronic equipment, including semiconductors.
– Integrated Circuits (ICs): Also known as microchips, ICs are miniaturized electronic circuits that are used in various electronic devices.
– Geopolitical tensions: Political conflicts or disputes between countries or regions that have an impact on their economic and strategic relationships.
– Supply chain resiliency: The ability of a supply chain to withstand disruptions and recover quickly from them.
– Wafer fabs: Manufacturing facilities that produce wafers, which are thin slices of semiconductor material used as a base for the production of electronic devices.
– IC design companies: Companies involved in the design and development of integrated circuits.
Suggested related links:
– World Semiconductor Trade Statistics
– Malaysian Investment Development Authority (MIDA)
– Ministry of International Trade and Industry (MITI)
The source of the article is from the blog guambia.com.uy