Tengku Zafrul: Move up value chain will position Malaysia at forefront of semiconductor industry

KUALA LUMPUR, June 26 — The initiative to elevate production up the value chain will position Malaysia at the forefront of the semiconductor industry, said Minister of Investment, Trade and Industry Datuk Seri Tengku Zafrul Abdul Aziz.

He said this move presents an opportunity for Malaysia to play a pivotal role in the global supply chain, especially amid the trade tensions between the US and China as companies are reconfiguring their supply chains.

“The semiconductor industry significantly influences the global supply chain. We have observed the realignment and redefinition of supply chains.

“As companies strive to become more competitive and secure their supply lines, the semiconductor industry is poised for continued growth,” he said at the Bursa Malaysia-Hong Leong Investment Bank Stratum Focus Series XVII “SEMICON: Light at the end of the tunnel?” event today.

Tengku Zafrul said Malaysia can and will leverage its mature industrial infrastructure with good connectivity, rule of law, strategic location and ease of doing business to further integrate ourselves into the global semiconductor value chain.

“This is a crucial moment for Malaysia, and we must seize this moment to ensure resilience and growth in our electrical and electronics sector,” he said.

Furthermore, he said transitioning to advanced packaging in the semiconductor industry demands substantial capital expenditure, which poses a challenge given the current fiscal constraints.

The move, while promising for technological advancement, would necessitate significant government support and fiscal backing.

“Advanced packaging requires very high capex, so this will also likely require a lot of support, which we may not have the fiscal space at this point in time.

“Hence, we need to be aggressive, but we need to be at the same time using our competitive advantage,” he said.

The Asia Pacific semiconductor market size was estimated at almost US$288 billion in 2023 and is forecast to reach US$612 billion (RM2.88 trillion) by 2033, growing at a compound annual growth rate of 7.83 per cent from 2024 to 2033.

The global semiconductor industry is expected to reach US$1 trillion by 2030.

Tengku Zafrul said the government is confident with the strong foundation in the semiconductor industry, Malaysia can be a true semiconductor powerhousem not just in assembly, but also in innovation and design. — Bernama