Summary Another big semiconductor push | The Star www.thestar.com.my
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Malaysia aims to boost its semiconductor industry but faces challenges in attracting foreign talent and developing local engineering talent to meet the demands of global firms.
Slides
Slide Presentation (13 slides)
Key Points
- The National Semiconductor Strategy (NSS) announced during SEMICON South-East Asia 2024 is a step in the right direction for Malaysia's semiconductor industry
- The NSS needs to acknowledge that Malaysia cannot move up the semiconductor value chain without attracting foreign engineering talent into the country
- The NSS aims to steer Malaysia towards producing 60,000 high skilled engineers, but it is unclear how this will be achieved
- The NSS also aims to make Malaysia a global R&D hub for semiconductors, featuring world-class universities, corporate R&D, and centres of excellence
- Instead of the government trying to create another government-owned wafer fabrication company, the RM25 billion allocation should be used to subsidize integrated circuit (IC) design houses
Summaries
25 word summary
Malaysia aims to boost semiconductors, but lacks foreign talent. Local education struggles to meet demand as global firms recruit engineers. Malaysia should emulate China's model.
51 word summary
Malaysia's semiconductor strategy aims to boost the industry, but lacks attracting foreign talent. The local education system struggles to meet demand, as global players recruit engineers. Malaysia should emulate China's model, subsidizing foreign senior engineers for IC design. The RM25 billion should focus on higher-value enterprises, not another government-owned wafer fab.
115 word summary
Malaysia's National Semiconductor Strategy aims to boost the semiconductor industry, but lacks a crucial element - attracting foreign engineering talent. The local education system struggles to meet the industry's demand, as global players actively recruit foreign engineers. The strategy sets ambitious targets, but achieving them requires opening up to foreign talent. Malaysia should emulate models like China's, which subsidizes foreign senior engineers for IC design houses. The RM25 billion allocated should focus on subsidizing these higher-value enterprises, rather than creating another government-owned wafer fab. Malaysia's strategic location and existing industry strengths position it well to become a global semiconductor hub, but the strategy must address the talent gap and provide necessary support to facilitate growth.
346 word summary
Malaysia's National Semiconductor Strategy (NSS) aims to propel the country's semiconductor industry forward, but it lacks a crucial element - the acknowledgment that attracting foreign engineering talent is essential for moving up the value chain.
The industry faces a shortage of high-quality engineers produced by the local education system, exacerbated by the influx of foreign investment and companies setting up operations in the semiconductor ecosystem. Global players are actively recruiting foreign engineers and offering them residency in countries like the US and Singapore.
The NSS sets ambitious targets, such as producing 60,000 high-skilled engineers and establishing Malaysia as a global R&D hub for semiconductors. However, these goals cannot be achieved without a concerted effort to open up to foreign talent. The Malaysian government's reluctance to provide work permits and residency for foreign workers in high-skilled jobs is a significant barrier.
To address this, the NSS should emulate models like China's, which subsidizes the salaries of foreign talent in the form of senior engineers for IC design houses. These costly enterprises are the right targets, as they are higher up the value chain, generate better profits and margins, and involve the creation of intellectual property.
The RM25 billion allocated to boost the sector should be directed towards subsidizing IC design houses, rather than creating another government-owned wafer fabrication company, which has proven to be a costly failure in the past.
Malaysia remains a significant beneficiary of the US-China trade war, as the country has become a bridge between the two superpowers. Setting up production facilities in Malaysia allows companies to circumvent trade sanctions and reduce supply chain risks.
The NSS is a step in the right direction, but it needs to go beyond a good big-picture plan. It should push for facilitative initiatives, such as fast-tracking the hiring of foreign engineers and reducing red tape in the creation of more enterprises in the sector.
By addressing the talent gap and providing the necessary support, Malaysia can position itself as a global hub for semiconductor R&D and manufacturing, leveraging its strategic location and existing strengths in the industry.
662 word summary
Another Big Semiconductor Push
The National Semiconductor Strategy (NSS) announced at the recent SEMICON South-East Asia 2024 conference is a step in the right direction for Malaysia's semiconductor industry. However, the plan lacks a crucial element - the acknowledgement that Malaysia cannot move up the value chain without actively attracting foreign engineering talent.
Industry veteran Datuk Seri Wong Siew Hai has highlighted the shortage of high-quality engineers produced by Malaysia's education system. This problem has been exacerbated by the spike in foreign investment and companies setting up operations in the semiconductor ecosystem here. The global players are actively bringing in foreign engineers and offering them residency in countries like the US and Singapore.
The NSS aims to steer Malaysia towards producing 60,000 high-skilled engineers, but it is unclear how this ambitious target will be achieved. The plan also sets goals for Malaysia to become a global R&D hub for semiconductors, featuring world-class universities, corporate R&D, and centres of excellence. These are commendable targets, but they will take time to develop and cannot be realized without a concerted effort to open up to foreign talent.
There is a general reluctance by the Malaysian government to provide work permits for foreign workers in high-skilled jobs, let alone issuing them residency status. The fear is that this would deprive Malaysians of job opportunities. However, industry officials have argued that bringing in one good engineer can create more local jobs as a spillover effect of the firm's success.
Another key aspect of the NSS is the allocation of RM25 billion to boost the sector. The details of this funding are still being worked out by the Ministry of Investment, Trade and Industry. One thing the government should avoid is trying to create another government-owned wafer fabrication company. Past attempts, such as Silterra and 1st Silicon, have proven to be costly failures, with huge investments written off by the government.
Instead, if the funds are to be spent, they should go towards subsidizing integrated circuit (IC) design houses. The NSS envisions the creation of more IC design and advanced packaging companies in Malaysia, which are the right targets as these companies are higher up the value chain, generate better profits and margins, and involve the creation of intellectual property.
IC design houses, however, are costly enterprises, with software, hardware tools, prototyping, and the salaries of design engineers running into the tens of millions of ringgit. Countries like China provide subsidies for every step of the IC design house journey, including subsidizing the salaries of foreign talent in the form of senior engineers. This is a model Malaysia could emulate to support the growth of its semiconductor sector.
The NSS is a step in the right direction, as the semiconductor industry is a source of pride for Malaysia and one that the country should continue to bank on for further growth. However, many other governments have also recognized the importance of the sector and are ramping up their own national plans, such as in India and Vietnam.
Malaysia remains a significant beneficiary of the trade war between the US and China, as the country has become a bridge between the two superpowers. Setting up production facilities in Malaysia allows companies to circumvent trade sanctions and reduce supply chain risks.
The NSS needs to be more than just a good big-picture plan. It should also push for facilitative initiatives, such as fast-tracking the hiring of foreign engineers and reducing red tape in the creation of more enterprises in the sector. Despite past failures in nudging the semiconductor industry higher up the value chain, it is not too late for Malaysia to try again.
The key is to acknowledge the need for foreign talent and create an environment that is conducive for the semiconductor industry to thrive. By addressing the talent gap and providing the necessary support, Malaysia can position itself as a global hub for semiconductor R&D and manufacturing, leveraging its strategic location and existing strengths in the industry.