STAKEHOLDERS WORKING TOGETHER KEY TO EXECUTING NSS EFFECTIVELY

By Nurul Jannah Kamaruddin & Mikhail Raj Abdullah

KUALA LUMPUR, May 30 (Bernama) -- Malaysia is upping the ante in efforts to stimulate the semiconductor industry and prepare for the Artificial Intelligence (AI)-driven surge in high-powered chips demand.

But effective execution of the plan is key to the success of the National Semiconductor Strategy (NSS), unveiled in conjunction with large-scale SEMICON Southeast Asia 2024.

Understandably, the government has earned kudos for responding quickly to the tipping point of a new era for AI with the unveiling of the NSS.

A pertinent feature of NSS is that it is a living document, evolving as needed given that global competition in the sector is undoubtedly stiff.

However, the rewards are aplenty. It promises immense economic benefits, especially in generating massive employment opportunities.

But to rake in those economic benefits, the entire gamut of stakeholders must pull together in the same direction to build a strong semiconductor industry for Malaysia. 

Be they ministries, agencies, state governments, industry-related players, or higher learning institutions, they must set aside their differing complexities, adopt a common goal in NSS, and play their part in operationalising the NSS effectively.

Meaningful Local Collaborations Can Complement Ecosystem 

It is therefore imperative for all stakeholders to streamline their strengths and priority areas towards the common goal, i.e. the NSS, and discard age-old habits of pushing the buck to others.

As history has shown, Penang was regarded as the Silicon Valley of the East and is still now the main choice for foreign direct investment, thanks to its well-established ecosystem which other states can emulate.

To this end, state jurisdictions as well as Federal agencies cannot allow bureaucratic constraints to delay the implementation of the NSS.

This is to ensure the nation can make the whole of Malaysia an attractive location for foreign semiconductor companies trying to relocate to avoid the US-China chip war and rising costs. 

As Prime Minister Datuk Seri Anwar Ibrahim stressed when unveiling the NSS earlier this week, Malaysia needs to be agile and adaptable “by strengthening our foundations to different contexts and circumstances.”

His message was clear, that Malaysia’s policymakers and the semiconductor industry must act with a sense of urgency as well as exercise flexibility to lure foreign direct investments (FDIs).

In making a clarion call for investors to choose Malaysia as their preferred investment destination, he has given the assurance that the government will continue to provide support.

They include supporting initiatives to facilitate trade, investment flow, business travel, and enabling institutions, including centres of excellence, universities, research arms, and industry associations to drive innovation, conduct cutting-edge research, and nurture talent for the semiconductor industry.

Now, are stakeholders ready to take up the challenge?

Working As a Region To Nurture Talent Together, Facilitating Mobility 

The industry on the global front is facing critical challenges—attracting and retaining talent and addressing the widening skills gap as a result of rapid technological advancements.

It is timely we bring back Malaysian talent working overseas and attract foreign talent, who are pivotal to developing the sector in neighbouring countries and other countries, to help implement the NSS successfully.

In wanting to win the talent war, the carrot the corporate sector must dangle is to offer highly competitive salaries.

On that note, former Deputy Minister of International Trade and Industry Dr Ong Kian Ming’s recommendation that Malaysia and neighbouring countries join hands to develop a new semiconductor hub is worth considering.

Malaysia can start the ball rolling with Singapore to develop the Johor-Singapore Special Economic Zone (JS-SEZ) as a new semiconductor hub, facilitating talent flow with potential passport-free mobility for workers between the two countries.

This is also an interesting way to avoid a talent war or pinching of skilled semiconductor experts and engineers, a practice that is notorious among global semiconductor firms, especially with declining interest among Malaysian students in Science, Technology, Engineering, and Mathematics (STEM).

According to the Education Ministry, the enrolment of students into the STEM stream was low at 45.73 per cent in 2023.

Under the NSS, Malaysia is set to woo at least RM500 billion of investments, establish at least 10 Malaysian companies in design and advanced packaging with revenues of between RM1 billion and RM4.7 billion, and nurture at least 100 semiconductor-related companies with revenues close to RM1 billion, creating higher wages for Malaysian workers.

To achieve the goal, Malaysia will develop a global research and development hub for semiconductors, featuring world-class universities, corporates, and centres of excellence and nurture 60,000 high-skilled Malaysian engineers.

The government has set the stage for the semiconductor sector to move up the value chain and for Malaysia to re-emerge as a preferred destination for global firms.

Despite intense competition for FDIs, Malaysia cannot afford to lose the semiconductor race as it promises immense spillover benefits in terms of revenue, jobs, technological upscaling and upskilling, as well as innovation and economic growth.

The NSS must succeed at all costs.

-- BERNAMA