AS THE world is evolving in terms of how technology is changing how we live, play and work, demand for devices that enable us to embrace this changing global landscape is growing at an unprecedented pace.
From electric cars to the next generation mobile devices that enable 5G transmission and robots that are highly capable, technology is the next big thing since the industrial revolution.
“At the heart of global technological advancement are semiconductors that make it all happen. Manufacturers are also building up capacity to meet growing demand even as the COVID-19 pandemic has caused significant set-back in growth,” commented investment and economic analyst Pankaj Kumar.
The World Semiconductor Trade Statistics has estimated global sales of semiconductor to grow 8.8% this year to reach US$601.5bil. Hence, Southeast Asia in general and Malaysia in particular are set to benefit from this robust growth.
Pankaj added that growth will be spread over all segments, especially in cloud computing, data servers, sensors and automated solutions.
As Malaysia is the sixth largest exporter of semiconductors and integrated circuits, demand for these products will propel Malaysian-based companies to achieve significant growth over the next few years.
Hotbed for new investments
With the growing global demand for semiconductors – not only out of the US and the European Union (EU) but also out of Asia, particularly from South Korea – Southeast Asia will be a natural choice for many top technology-based companies wishing to secure new supplies, according to Pankaj.
As evidenced by the presence of large multinationals (MNCs), there is ample opportunity for Malaysian-based companies to focus on front-end semiconductor manufacturing rather than the back-end of the semiconductor value chain such as outsourced semiconductor assembly and test (OSAT).
Furthermore, this will help the local industry players to build resilience towards market turbulence if any as we have seen before how over-capacity in the back-end could hurt a company’s future.
“Malaysian-based semiconductors’ market players should also build on sustainability for the long-term growth of the industry as with the right ecosystem, market players will have a brighter future as the business model is then built on a solid foundation,” observed Pankaj.
Creating jobs and raising FDIs
As stated by Pankaj, Singapore has long been seen as a natural choice for foundry players and this is expected to grow strongly over the next few years as the island-state focuses on attracting large MNCs into Singapore for wafer fabrication.
While Southeast Asian Governments have played a pivotal role in attracting new investments and foreign direct investments (FDIs) in the semiconductor industry, there are ample opportunities for governments to work together and leverage each other’s strengths to attract MNCs to be based in Southeast Asia.
The industry is the driver of exports, a strong contributor to the region’s gross domestic product (GDP) as well as one that helps to generate employment in every country where the industry strives.
With a strong talent pool and growing industry prospects as well as new investments, the industry will indeed strive while the current talent pool can be further enhanced with new skill sets.
Moreover, the Southeast Asian region is an oasis of growth for the semiconductor sector with plenty of room to grow and welcoming governments.
Semiconductor Equipment & Materials International (SEMI) Southeast Asia president Linda Tan remains positive that the semiconductor sector is still set for explosive growth due to its adoption and integration, hence eclipsing all other sectors.
“Global semiconductor sales which have been on an upward trend are set to be a boon for the Southeast Asia semiconductor industry,” commented Tan.
“SEMICON Southeast Asia 2022, the region’s premier gathering of the semiconductor and microelectronics industry which will be held in June 2022 will be a key platform that will drive conversations and collaboration so that the industry can continue in this upward trend cohesively.”
Themed ‘Forward as One: Building A Resilient and Sustainable Electronics Supply Chain in Southeast Asia’, the showcase will gather industry experts for the latest developments, innovations and trends across the semiconductor supply chain.” – June 15, 2022
