KUALA LUMPUR, July 26 (Xinhua) -- Malaysia is working to push forward its semiconductor sector in the face of challenges that have affected the supply of chips worldwide, said an industry veteran.
Among the near-term challenges faced by the sector include high demand, supply chain disruptions and manpower shortages, Malaysia Semiconductor Industry Association president Wong Siew Hai told Xinhua in a recent interview.
"Due to digital transformation (and) online business, everything is online, and everybody has to work at home. And so the demand for the chips went up," Wong said.
Intermittent closures of manufacturing operations during the pandemic, disruptions caused by weather events in Malaysia, including floods, and continued difficulties in sourcing workers for factories are great challenges to the industry.
"When you have disruptions like this, it is extremely difficult for you to have all the parts at the same time and because you don't have one or two parts, you can't ship the product; you're gonna wait for the part to come in. So all the lead time has increased," he said.
"This supply chain disruption is still happening. Maybe not as intense as last year, but it's still happening," he added.
Wong explained that disruptions affecting Malaysia have a wider impact as the country produces about 7 percent of the global supply and hosts 13 percent of the back end, including the assembly and testing.
According to Malaysia's Ministry of International Trade and Industry, electrical and electronics products worth 455.7 billion ringgit (102 billion U.S. dollars) were exported in 2021, up 18 percent from 2020 and representing 36.8 percent of Malaysia's total exports.
Despite the challenges, Wong remained positive about the future of the sector, which he said would recover and expand in the coming years.
Surging demand brings not only challenges, but also great opportunities, Wong said, with the development of emerging technologies like artificial intelligence, automatic driving and so on.
Malaysia is working to expand its capacity in chip manufacturing by building more factories, he said, adding that the number of factories in the country is expected to grow exponentially over the coming decade.
He added that steps to alleviate the situation include talks with the government to facilitate the entry of more foreign workers and a pilot program to train local school graduates on the job.
"That's why you see a lot of expansion, at least in Malaysia ... and then Malaysia is also able to attract new investors in the electronics industry," he said.
"If they are investing, that means that they are projecting that the semiconductor growth will be there," he said, "So most companies now are still investing for a longer term." ■
