Potential E&E Sector Growth through Heavy Investment

Breaking News : Likes our facebook page and join us as members, you will receive email updates and instant updates in Telegram group.

 CLICK HERE TO JOIN US AS MEMBER

FOUR decades may appear like a long time in an industry life cycle. Our electrical and electronic (E&E) industry has very much covered the industry life cycle — from infancy, growth, maturity to decline — and it has already entered the final stage as reflected in its dwindling share in exports and investments. The question of “what next” for E&E industry in Malaysia has been carefully addressed by the government in the Economic Transformation Programme (ETP).

According to Malaysia's  Performance Management & Delivery Unit's (Pemandu) website, the nation's  E&E sector accounted for RM37 billion or 6%  of Malaysia's GNI, and RM250 billion or 40% of the nation's total exports. E&E industry provided about 522,000 skilled and semi-skilled jobs. 

Now, MALAYSIA will easily exceed the RM10-billion mark in new investments in the electrical and electronics (E&E) sector under the National Key Economic Areas (NKEA) by year-end, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. Mustapa said between January and July alone, the country recorded RM8.4 billion in investments via 57 approved projects, exceeding 2014’s target of RM5.1 billion. By comparison, in 2013, the NKEA E&E sector registered 118 approved projects, with investments totalling RM9.8 billion, he said at a media briefing, here, yesterday.

Mustapa said products in the E&E sector were the biggest contributor to Malaysia’s exports between January and August, amounting to RM165.5 billion, or 32.9 per cent, of total exports. As a result, the 2,200 E&E-related companies, which employ 500,000 people in Malaysia, were able to account for RM47.4 billion of the country’s gross national income (GNI) and six per cent of the gross domestic products, making the country among the five largest exporters of semiconductor devices in the world. Ranging from semiconductor to industrial electronic industries, the groundwork for the industry and eco-systems has been clearly well-laid, indeed The major countries Malaysia exports its E&E manufactured products to are China (17 per cent of Malaysia’s E&E exports), Singapore (15 per cent) and the United States (13.8 per cent). Mustapa said the government has set itself a target of increasing E&E sector’s GNI contribution to RM90 billion by 2020 as well as creating 157,000 new jobs. "The E&E sector is important to Malaysia as it contributes about 33% to the nation's total exports.  "We believe a healthy E&E sector growth will bring offer better prospects for the Malaysian economy," he told reporters after launching Motorola Solutions Malaysia Sdn Bhd's new research and development centre, known as "Innoplex".

Malaysia definitely has a competitive edge, and this can be brought to even more favorable heights if talent can be further maximized. Malaysia has put a series of programs in place to address this issue, he relates. First, it has taken the industry's input into consideration to encourage more engineers and scientists to pursue Masters and Doctorates through government-funded MyMSc and MyPhD programs. Additionally, it has set up a number of Centers of Excellence in the country. The Centre of Electrical & Electronics, for example, is a government-supported initiative set up by the Northern Corridor Implementation Authority and operated by USains Infotech Sdn. Bhd. that supports SMEs and start-up companies through talent development, research collaboration and access to resources, sophisticated equipment and expertise. It is amazing that we can boast a northern corridor for 
semiconductors and industrial electronics, Klang Valley for sophisticated services, Johor for logistics intensive E&E manufacturing and Sarawak for silicon substrate manufacturing. Bursts of technology innovation by Asian giants show that the game is open to all. The entry of solar photovoltaic technology and light emitting diodes (LEDs) is a clear testament that we are already moving, but are we keeping pace?

Again we must not forget decisions undertaken today would be carefully watched by potential investors, particularly those looking out for services linked to CMOS logic, high-voltage and mixed-signal/ radio frequency technologies. Strategic alliance is a word encrypted and often misunderstood, especially in this globalisation era when economic nationalism is being feared by emerging markets like Malaysia. Being in control of critical industries is therefore not a choice. The American firms are also feeling the heat from the rapid changes in the E&E space and having long-term partner Malaysia as a partner.