Keeping pace with fast-evolving technologies is crucial to the E&E industry’s overall competitiveness (photo credit: MIMOS)
Malaysia’s electrical and electronics (E&E) industry achieved GNI of RM44.1 billion in 2014, up from RM38.7 billion in 2013. The 14% expansion outpaced the GNI growth of the nation’s 12 National Key Economic Areas (NKEAs) as a whole (7.8%) and of the country (8.4%), according to the Economic Transformation Programme (ETP) annual report 2014.
The total approved E&E investments of RM8.9 billion in 2014 far exceeded the target of RM5.1 billion, while the RM38.26 billion in cumulative investments approved from 2012-2014 are expected to start yielding results beginning 2015. Eighteen new high-impact projects were identified for implementation during the year, of which 11 were approved.
The E&E NKEA exceeded its KPI targets by 104% last year. The 2020 target for Entry Point Project (EPP) 11 – to establish Malaysia as a test and measurement hub – was also achieved last year, six years ahead of its targeted completion date. This was largely due to the wide availability of a range of new industry-enabling test and measurement facilities.
Support from government-linked agencies was instrumental in achieving this NKEA’s key performance indicator (KPI) targets for the year. This includes the Malaysian Automotive Institute (MAI), Multimedia Development Corp (MDeC), NanoMalaysia Bhd (NMB), the Land Public Transport Commission (SPAD) and Malaysian Green Tech Corp (MGTC). Their downstream activities helped to stimulate demand upstream. The Malaysian Investment Development Authority (MIDA) also contributed by attracting high-value R&D investments which catalysed growth.In the foreword for the E&E NKEA in the report, Dato’ Sri Mustapa Mohamed, Minister of International Trade and Industry (Miti) said the growth trend of Malaysia’s E&E sector is reflective of a concerted, industry-wide effort in the shift from low value-added activities to high-value operations to remain competitive in a globalised economy.
In the foreword for the E&E NKEA in the report, Dato’ Sri Mustapa Mohamed, Minister of International Trade and Industry (Miti) said the growth trend of Malaysia’s E&E sector is reflective of a concerted, industry-wide effort in the shift from low value-added activities to high-value operations to remain competitive in a globalised economy.
He said keeping pace with fast-evolving technologies is crucial to the E&E industry’s overall competitiveness vis-à-vis other regional markets. “Increasingly, global demand for E&E through its Internet of Things and nanotechnology morphs the industry into the game-changer foreseen, catalysing growth in other sectors. Massive opportunities loom for other sectors to adopt cutting-edge technologies as a result of E&E technological enhancement inherently increasing productivity.”
“These global trends are set to create new growth opportunities in the upstream and downstream segments of the industry. This must be the way forward for Malaysian players to remain competitive globally,” he adds.
Datuk Dr Ewon Ebin, Minister of Science, Technology and Innovation (MOSTI) said MOSTI will continue to drive the efforts to transform the E&E sector.
“The establishment of advanced shared facilities will continue to provide a cost-effective and comprehensive resource to the industry and academia, adding and innovating value to the industry hence creating a vibrant and resilient E&E ecosystem in the country. Through its various enabler and catalyst programmes, MOSTI with its agencies will continue to play vital roles in the advancement of E&E in Malaysia and to support the attainment of the GNI target of RM90 billion by the year 2020.”
In 2014, Malaysia made its way into the top 20 out of 144 countries on the World Economic Forum’s Global Competitive Index (GCI) for the first time since the current methodology was introduced in 2006. The report also ranked Malaysia 4th in financial market development, making it relatively easy for E&E companies to access capital. Malaysia was also ranked 10th in incentives for investment and 10th in the number of procedures and formalities to start a business for E&E companies. Furthermore, the World Bank’s Ease of Doing Business Index 2014 ranked Malaysia 18th, with the country’s regulatory environment more conducive to E&E business operations than in China and Taiwan.
ETP custodian Performance Management and Delivery Unit (PEMANDU) believes continued growth of the E&E industry in Malaysia hinges on the greater participation from the private sector in driving upstream activities. This will be crucial in increasing the value-add of the Malaysian industry in tandem with the country’s transformation into a high-income economy. “Other key initiatives required are MNC-local vendor development partnerships as well as encouraging the growth of integrated circuit (IC) design firms.”
Entry Point Projects (EPPs) under the Electrical and Electronics (E&E) NKEA
- EPP 1: Executing a smart follower strategy for mature technology fabrication
- EPP 2: Developing assembly and testing using advanced packaging technology
- EPP 3: Developing integrated circuit (IC) design firms
- EPP 4: Supporting the growth of substrate manufacturing and related industries
- EPP 5: Increasing the number of silicon producers
- EPP 6: Growing wafer and cell producers
- EPP 7: Increasing solar module producers
- EPP 8: Developing LED front-end operations
- EPP 9: Expanding LED packaging and equipment
- EPP 10: Creating local solid state lighting champions
- EPP 11: Building a test and measure hub
- EPP 12: Expanding wireless communications and radio frequency identification (RFID)
- EPP 13: Growing automation equipment manufacturing
- EPP 14: Building transmission and distribution companies
- EPP 15: Building electrical home appliance manufacturing hub and international distribution network
- EPP 16: Development of balance of systems for solar photovoltaics (PV)
- EPP 17: Grow the embedded systems industry
- EPP 18: Enabling electric vehicle component manufacturing
- EPP 19: Supporting regional rail MRO service via E&E component manufacturing
- EPP 20: Enabling industries through nanotechnology
To further drive the growth of the Malaysian E&E industry, especially to encourage private sector participation and the development of smaller players, EPPs 1-4 have been placed under a semiconductor cluster, with MIDA and MIMOS working together to develop a programme focused on further developing the semiconductor industry, ensuring end-to-end solutions are available in Malaysia.