Bower Group Asia: Malaysia in ‘sweet spot’ given disruptions to global semiconductor supply chain

Geopolitical tensions between the United States and China could result in Malaysia emerging as an even stronger player within the global semiconductor ecosystem and supply chain.

Bower Group Asia (BGA) Malaysia Managing Director Hazree Turee said that, given more investor-friendly policies and conducive public-private partnerships, Malaysia could emerge as a clear industry winner particularly in packaging and testing.

“Malaysia is currently in a ‘sweet spot’ given current disruptions to the global semiconductor supply chain,” said Hazree [Far right in pic, with MITI Secretary General Datuk Seri Isham Ishak (second right) and BowerGroupAsia (BGA) CEO and President Ernie Bower (far left) and Malaysia Semiconductor Industry Association (MSIA) President Dato’ Seri Wong Siew Hai.].

“What the country has done extremely well is instilling trust within the international semiconductor community, and paid utmost respect to intellectual properties (IPs) while being a dependable player within the global supply chain.”

“Packaging and testing are the country’s international strengths, and these are areas Malaysia should continue to focus on,” he added.

Semiconductor packaging involves enclosing integrated circuits (IC) form factors that fit into specific devices.

IC testing, in turn, is conducted essentially at two levels: the probe test that tests wafers, and the final test after packaging. Wafer testing uses a prober and a probe card, while package testing uses a handler and a test socket, together with a tester.

BGA CEO and President Ernie Bower said that Malaysia can emulate Taiwan’s success in this field with the right mix of policies: “What Taiwan has done successfully is not to attempt to do everything but, instead, introduced a right mix of public policies while encouraging capital and the labour workforce towards growing its semiconductor industry.”

“Taiwan also introduced tax breaks and necessary incentives for inbound investments into the country, initiatives that Malaysia could learn from.” added Ernie.

They were speaking at an industry dialogue, ‘Malaysia’s Missing Piece in the Semiconductor Puzzle’, held recently at the Ministry of International Trade and Industry (MITI).

MITI Secretary General Datuk Seri Isham Ishak, meanwhile, said that Malaysia would be unveiling its industry masterplan by October 2023 to reinforce Malaysia as a hub for global semiconductor industry.

“The masterplan will present a set of comprehensive strategies and action plans to ensure synergies at both the policy and industry level, particularly in creating supportive ecosystems to help catalyse Malaysia’s industrial development into the future,” he said.

“Malaysia is looking to attract more high-quality investments in the semiconductor manufacturing industry, particularly in the front end of the supply chain, which includes integrated circuit design, wafer fabrication and equipment manufacturing.”

Datuk Seri Isham added that the electrical and electronics industry contributed significantly to the country’s economic growth, adding that it was the cornerstone of Malaysia’s manufacturing sector.

“The industry accounted for 7.2% of Malaysia’s gross domestic product and around 40% of exported manufactured goods, of which semiconductor is the most significant segment.”

Also present at the industry dialogue were Malaysia Semiconductor Industry Association (MSIA) President Dato’ Seri Wong Siew Hai and BGA Senior Advisor Rupert Hammond-Chambers.

BGA is today a strategic advisory firm that specialises in the Indo-Pacific region. The company has a strong reputation for its ability to provide actionable intelligence to implement strategies, expand business, solve problems while serving the communities that BGA operates in.

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