KUALA LUMPUR: Malaysia's semiconductor companies have appealed to the government to let electrical and electronics (E&E) factories operate during the Enhanced Movement Control Order (EMCO).
The EMCO has been imposed from July 3-13 in Selangor's districts and several localities in federal territory of Kuala Lumpur.
Malaysia Semiconductor Industry Association (MSIA) said Malaysia was a key global player with seven per cent of the total semiconductor trade flows through the country.
A halt in production would disrupt the supply chain, MSIA said in a statement on Saturday.
Malaysia, said MSIA, was a major part of the global electronics supply chain with E&E exports at 39 per cent (RM386 billion of Malaysia's total export, contributing 6.8 per cent of national gross domestic product and employing 575,000 headcounts in 2020.
"The disruption of the supply chain will result in the inability of global companies to assemble and produce critical infrastructure, medical equipment like ventilators, medical devices, and other essential products.
"We urge the authorities to take into consideration these exemplary companies who have maintained the highest standard operating procedures (SOPs) compliance and extended great effort to assist the country to break the chain by regular testing," said president Datuk Seri Wong Siew Hai said in the statement.
MSIA said it appreciated the government's swift action to protect the rakyat from Covid-19 but it needed to balance between lives and livelihood.
"Given that some of the key chip makers are located in the EMCO areas, any disruption in production will not only reverse the positive spillover the firms gained from global chip shortages but also put Malaysia in the negative spotlight for exacerbating the global chip shortages," Wong said.
He said two biggest burn-in service suppliers that provide support to other factories in Malaysia, were located in Kuala Lumpur.
"This could potentially affect overseas corporate investment intentions and they would likely permanently transfer their products to other locations outside of Malaysia. The many small and medium enterprises supporting the multinational corporations and limited liability companies will also be severely impacted."
Wong said customers might look for suppliers elsewhere, and this in turn pose risks of losing the E&E ecosystem which had been organically developed for the past 50 years.
Over the last three weeks, MSIA said, 14 surprise audits had been conducted by the authorities on its member companies and all of them were found to be fully compliant with the SOPs.