economy

Malaysia needs to build complete semiconductor infrastructure to spur investments

KUALA LUMPUR: Malaysia needs to develop a complete semiconductor infrastucture to increase investments into the semiconductor industry in the country, said Taiwan Industrial Technology Research Institute (ITRI) executive vice president Chang Pei Zen.

"In the United States, we chose Arizona as a semiconductor hub due to its pre-existing Intel factory and a well-established network of packaging facilities.

"This strategic selection reflects the cost-effectiveness and efficiency gained by utilising existing infrastructure, reducing the necessity to build from the ground up.

"The same principle applies to Japan, where semiconductor production sites are strategically chosen, and Dresden in Germany, known for its advanced semiconductor infrastructure," he said.

Chang acknowledged Malaysia's favourable position, citing the nation's abundant natural resources and strategic geographic location in the heart of South East Asia.

He said the potential for Malaysia to leverage these advantages in building a robust semiconductor industry is vast, emphasising that the country has a better supply of certain materials compared with Taiwan.

"The move towards enhanced infrastructure, coupled with strategic positioning, could propel Malaysia into a prominent role in the semiconductor landscape, contributing to the nation's economic growth and technological advancement," Chang told the Business Times in an interview.

He said when Taiwanese companies decide where to invest in semiconductor production, two crucial factors come into play, including existing infrastructure and the availability of skilled talent.

According to Chang, Japan and Germany's robust semiconductor infrastructure and availability of skilled talent has positioned them favorably as a choice of investment's destination.

Meanwhile, ITRI senior technology expert Wu Chih-I said Malaysia needs to strategically position itself in the semiconductor value chain by leveraging its existing strengths.

Recognising the vastness of the semiconductor ecosystem, Wu suggests that focusing on one or two key segments where Malaysia excels can be a strategic move.

"Based on Malaysia's current strengths, I think the country should ascend its value chain by specializing in advanced packaging.

"This is because advanced packaging presents a higher-value opportunity compared to traditional back-end packaging, attracting major players in the semiconductor industry who are keen on developing and commercializing cutting-edge technologies to cater to premium customers," he said.

In addition, Wu said this strategic move would not only attract investments from Taiwanese firms but also entice other global players to establish research centers, positioning Malaysia as a hub for advanced packaging technologies.

This, in turn, he said, would serve as a catalyst for cultivating local talent and fostering a skilled workforce within the country.

"Many skilled workers, including engineers and technicians, often seek employment opportunities in countries like Singapore, attracted by superior infrastructure. "By elevating Malaysia's position in the semiconductor value chain, I believe the country will not only retain its skilled workforce but also become an attractive destination for new investments and technological advancements in the semiconductor domain," he added. Ends

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