By Tindaro Danze
A confluence of economic and geopolitical factors are driving interest and foreign investments in Malaysia’s semiconductor ecosystem. While some have argued that it has been largely external factors – namely, Sino-American tensions – that drive global interest in the country’s chip ecosystem, take nothing away from the country’s semiconductor prowess.
Malaysia’s foray into the semiconductor industry began in the 1970s, and Siemens was one of the pioneers that contributed to the local chip ecosystem, having set up one of Malaysia’s first semiconductor plants in 1972.
Sustainability in chip design
Malaysia commands 13% of the global manufacturing testing market share and exported nearly RM580 billion in semiconductor products in 2023. Regionally, the Asia Pacific (APAC) semiconductor market is projected to enjoy double digit growth in 2024. In short, demand is growing, and Malaysia is in a position to fill those orders. Complacency, however, could easily see the country lose out to other regional upstarts.
Having built a name for itself in the packaging and testing space, the industry would do well to move into higher value activities like wafer fabrication and integrated circuit (IC) design. Malaysia is well-placed to lead by example in building greater sustainability into the semiconductor space.
As the world continues to embrace sustainability and circularity in business practices, it follows that chip manufacturers, regardless of where they are in the supply chain, ought to be doing the same. Smart, secure, and sustainable process for designing and producing next-generation chips are paramount. This includes minimizing energy consumption, reducing water usages, and responsible sourcing throughout the entire lifecycle, from raw materials extraction to end-of-life product management.
We’re at the point now, for example, where the very machines used not just in packaging and testing, but even across foundries and IC plants, are being designed with mechatronic concept designer (MCD) platforms. What’s particularly special is that these MCD platforms are now themselves integrated with AI-powered, physics-based “digital twins”.
Far from just static assets in virtual reality, these machines can be “operated” and stress-tested within the virtual environment, allowing companies low-risk, cost-effective opportunities to predict performance, optimize operations and implement improvements, all without incurring the cost of building physical prototypes. These complex and costly machines can now be designed and built far more efficiently, minimizing waste and resource consumption. As a member of the Semiconductor Climate Consortium (SCC), Siemens is leading by example, embedding sustainability into the sector through advanced design, intelligent, scalable manufacturing operations, and lifecycle management, all while minimizing the industry’s carbon footprint.
Malaysia’s multi-billion-dollar semiconductor ecosystem must also be complemented by an equally world-class workforce capable of delivering high quality digital services. Like Moore’s Law, which postulates an approximate doubling in processing power every couple of years, so too must the talent undergo equally substantive upgrades in short order.
This is exemplified by Siemens’ recent partnership with Selangor Technical Skills Development Centre (STDCx) and local tech consultancy, Orangeleaf Consulting, to adopt Mendix, Siemens’ low-code platform, to help organizations accelerate their digital transformation efforts. Think of low code as a digital canvas, on which non-expert users are empowered to build unique enterprise-grade apps using a vast array of boilerplate code and objects. Simply put, the partnership empowers non-experts to undertake app development, which helps mitigate Malaysia’s digital skills gap.
Innovating in foundational sectors of the economy
As exciting as the chip ecosystem is in Malaysia, there are several other industries that are in line to digitally transform in the next few years. Key to Malaysia’s sustainability story is optimizing the use of existing, non-renewable utilities such as water – a deeply important yet underappreciated utility.
Malaysia needs to upgrade the national water infrastructure over the next few years. This is crucial not just for the public interest, but to serve key industries like high value-added manufacturing, the local semiconductor supply chain, data centre cooling requirements, medical technology, and more.
It is now possible to integrated next-gen technologies such as artificial intelligence and cutting-edge, low-power sensors throughout the physical water infrastructure, reducing pipe leaks by up to 50%. These systems are so sensitive, they can identify leaks as small as 0.5 litres per second across thousands of kilometres of water pipelines.
As Malaysia becomes entrenched as a global semiconductor hub, the integration of next-gen AI-enabled technologies are creating new opportunities for advancement in an industry already rife with innovation. More broadly, the emergence of these new technologies creates major efficiency gains across other parts of the economy.
Siemens will be at the upcoming Semicon SEA 2024 flagship industry event, where we look forward to engaging with visitors on key industry issues of the day, in addition to speaking about maintaining Malaysia’s semiconductor supremacy for years to come.
The author is the President & CEO, Siemens Malaysia
