Can Malaysia’s Semiconductor Industry Compete?

Malaysia's semiconductor industry has seen impressive growth. Following in the footsteps of its Asian neighbors, the country successfully built itself up as an attractive location for foreign direct investment. It leveraged that to make a place of its own in the semiconductor industry.

But that industry has found itself sort of caught in the middle. Unable to invest in the future, the country’s small local cluster of semiconductor firms find themselves stuck in a tenuous place low in the value chain. With seemingly few good prospects out.

In this video, we are going to look at Malaysia's place in the global semiconductor industry.

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[Asianometry]

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[WPI]

As an American semiconductor engineer, I've worked with many Malaysian colleagues for over 25yrs and got to visit twice. Always great workers. Thanks for the good overview!

[jason__lai]

As a Malaysian, I’m extremely impressed at how much research you’ve done to understand the intricacies of our race-based policies and its effects on the economy

[mesra]

This is a good piece of information regarding Malaysia's journey in the semiconductor industry. I hope foreign investors will look forward to making Malaysia their best choice location for the advanced microchip manufacturing platform. Malaysia is away from conflict zone such as in the Taiwan Strait. As a Malaysian, I hope the policy of our government pursuing the zone of peace, freedom, and neutrality for southeast Asia will augur well for prosperity.

[MrSagowoon]

Don't underestimate the destructive power of the local politicians

[Flybyhacker]

This video conclusion truly emphasises what Malaysia's Semiconductor Industry faced.
Anyway, Khazanah Berhad has sold Silterra to Dagang NeXchange Bhd (DNeX) and a Chinese firm for RM273mil (66m USD). Yet this sells off deemed too cheap with current high semiconductor demand and billions of Ringgit spend to Silterra over a decade.
Well, Malaysia's may stay in the IDM market for the next decade.
The will, money and politics, just doesn't align to Malaysia to build and become cutting edge pure foundry.

[Mirsab]

You're quickly becoming one of my favorite channels now!

[TheJohnnyJohnny]

As a Malaysian, I can't thank you enough for making this video. This is certainly a breathtaking information about my coutry. There are tons of problem that were undisclosed due to some save face political censorship. Now we know our pain point of the problem that need to be solved in the future.

[nickj]

I have visited several Packaging plants in Malaysia between 2008-2010 and met many hard working intelligent people there. I was told engineering students at the time were somewhat hindered due to Malay language being prioritized over English at university in the 2000s. When intel expanded its packaging operations in the 2010s, it went to Vietnam. Interest to note Fairchild has packaging in both Penang and Tijuana Mexico.

[LexDomo]

Intel has been on hiring spree for chip engineer here in Malaysia. A lot of my friend who has not yet finish their education have been offered jobs by Intel. Intel also hired a lot of engineers from silterra. This come out as a surprise for me bcs I always though semiconductor industry in Malaysia sucks

[johnwig]

Malaysia has a lot of potential but that potential is destroyed by its politics including race politics.

[marioalvarez]

I've learned so much from you! I'm going to give you 6 dollars and watch the rest of your videos

[zulfakaraspar]

At 10.40s, there is a little bit confusion. MIMOS Berhad is not the founder or origin of Silterra. Wafer Technology (Malaysia) Sdn. Bhd. is totally different company than MIMOS Berhad. MIMOS setup her own IC design and fabrication known as MIMOS Semiconductor Sdn. Bhd. It can only fabricate at 0.5um and later at 0.35um while Silterra Malaysia was found to be able to fabricate starting at 250nm. I worked as a design consultant at MIMOS Semiconductor Berhad from 2000 to 2001 while still being a lecturer. I have several IC design patents now and currently planning to setup my own fabless design company. Those who want to collaborate or invest in my new company can contact me personally. I am still working at Universiti Teknologi Malaysia as a Senior Lecturer. We are the best in IC design among Malaysia universities. But, we don't do fabrication since it involves a lot of money. Intel have a special Master program to up skills their engineers with us for more than ten years which other universities fail to deliver.

[shde]

As a Malaysian, I thank you for giving a fair and objective discussion on this topic. Too often us Malaysians are hard on ourselves and we're too quick to criticise policy failures rather than examining the problem. From your videos, it's enlightening how challenging this industry can be and other nations have also tried and end up in the same boat. Frankly, it's uncanny how much your videos on Taiwan resonate to many of the problems we're facing but at much earlier phases of development.

I think one of the problems could also be attributed to a mixed message about local labour or talent. On one hand, development agencies will market how competitive labour costs are. Making labour cost a USP sends a wrong message when you're trying to compete for skilled workers. It's funny to see some employers expect an Ivy League quality hire with $14-16k annual pay package. While many employers are bumping wages to remedy this, it's still nowhere near as competitive and talent retention continues to be a problem.

Also, what's less spoken of is the setting of "convoluted priorities" especially when problems have snowballed. You've already noted some evidence of this with the choice for local appointments for Silterra than finding qualified, experienced executives for leadership positions. Coupled with the talent bidding/retention issue as mentioned, it may be the case that red tape and socioeconomic KPIs could have led to interventions on business decisions at the (unintended?) expense of building a viable enterprise. It happens too often problems snowball and Khazanah ends up in a position of trying to fix a leaky ship while juggling pressures to retain jobs, industry capacity etc. It's really unfortunate because Khazanah, as a strategic investor, spends a lot of their capital and brain trust fixing problems which could have otherwise be spent seeding or supporting new growth opportunities.

[pewpewwee]

There is a Malaysia company named Frontken have subsidiary Ares Green Technology Corp in Taiwan that provide ultra cleaning for TSMC

[esselsid]

In 2021 its not a question of whether you're semi conductor industry can compete... Just HAVING a semiconductor industry by itself is a huge deal

[fabianmok]

As a Malaysian i will say this, as long as we have the real intent and drive to find a way, there will always be a niche we can good at. There is no single country that can be the best at everything and there are so many niches in this world that can be a real growth driver. All that is needed is intent and drive.

[RideForFitnessSG]

Malaysia has so much potential. It is a gifted child, blessed with natural resources, strategic location, beautiful and diverse people. Instead of capitalising on the cultural diversity, it has become the stumbling block of the country's progress.

[KYspeaksfood]

Couple of corrections

- Penang is pronounced as "pee neng" instead of "pee nang", my hometown. :)
- bumiputra is not a "race" but rather a cluster of different ethnic groups that are deemed as "natives" to the country, making up over 50% of the population, notably excluding Chinese & Indian who has ancestors from China & India even though they're born in Malaysia.

Great video with very informative overview of what happened. Hope our country gets out of this current rut soon enough.

[bluestar]

I remember the semiconductor factories in the Free Trade Zone in Penang back in the late 1970s. Companies such as National Semiconductor (NS), AMD, Intel, Hewlett-Packard (HP), Bosch, Hitachi, etc... I also visited SilTerra back in early 2010s. Wow, this video brought back lots of memories! Thank you!