US-MALAYSIA MOC, IPEF MAKE SEMICONDUCTOR, ELECTRONICS SUPPLY CHAINS MORE RESILIENT - ASSOCIATION

KUALA LUMPUR, May 25 (Bernama) -- The recent signing of the US-Malaysia Memorandum of Cooperation (MOC) on Semiconductor Supply Chain Resilience and the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) will help lower costs by making semiconductor and electronics supply chains more resilient in the long term.

The IPEF with a dozen initial partners namely Malaysia, Australia, Brunei, India, Indonesia, Japan, South Korea, New Zealand, the Philippines, Singapore, Thailand and Vietnam represent 40 per cent of the world’s gross domestic product (GDP).    

Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said the US-Malaysia MOC in Semiconductor Supply Chain Resilience and the IPEF are positive developments for the Malaysian semiconductor and electrical and electronics (E&E) industry. 

“They further consolidate Malaysia’s position as one of the critical global semiconductor hubs,” he said in a statement today. 

According to MSIA, Malaysia will continue to be an attractive investment location for semiconductor and E&E companies. 

Last year, Malaysia recorded approved investments of RM148 billion, which was 9.5 times the approved investments in 2020 of RM15.6 billion.

“The trend for investments is expected to continue with the recent mission by Senior Minister of International Trade and Industry Datuk Seri Mohamed Azmin Ali to the United States,” it said. 

MSIA said the industry is experiencing a period of high growth with digital transformation and emerging technologies such as Internet of Things (IoT), artificial intelligence, smart factories and autonomous vehicles.

It said semiconductor companies like Intel, Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) and China, US and Europe have announced investments over the past one year, exceeding US$550 billion (US$1=RM4.39) in fabrication plants to meet the increasing demand for semiconductors.  

“Companies in Malaysia are expanding and increasing capacity to address the shortage in semiconductor chips. Malaysia is also attracting new investments to strengthen its supply chain.

“A more resilient and flexible semiconductor supply chain will allow the industry to manage market volatility much better,” it said.

The association said the industry must steer a course towards a future where sustainable growth can be achieved through resilience and an open and connected world.

“This is important as the semiconductor and electronics sector has the most complex and geographically dispersed value chain in the world,” it added. 

-- BERNAMA