YAB Tuan Chow Kon Yeow
Chief Minister of Penang
YBhg. Dato’ Loo Lee Lian
CEO of InvestPenang
YBhg. Dato’ Seri Tan Eng Kee
CEO of Greatech Mechatronics (M) Sdn Bhd
Ladies and gentlemen,
Good morning and Salam Malaysia Madani,
It is a pleasure to be here today at the launching ceremony of the United Local Synergy Program, an initiative that brings together seven outstanding Malaysian companies in a powerful collaboration to enhance our local supply chain, drive innovation, and jointly build Malaysia’s international presence.
Almost two years ago, Dato’ Seri EK Tan gave me a tour of his plants in the area, and he shared with me his vision to make Malaysia known for automated technology or advanced technology equipment (ATE). I thought that was a bold vision.
Building on this vision, we launched the ATE cluster under the Malaysia Semiconductor Industry Association (MSIA) in September last year. But today is something new, and I want to dedicate my speech to something which I think goes beyond your title.
“United Local Synergy” is your core ideal. But I think at some point, this theme can be transformed to be “Team Malaysia”.
Why should we talk about “Team Malaysia”?
The National Semiconductor Strategy, launched by Prime Minister Datuk Seri Anwar Ibrahim on May 28 last year, put the emphasis on creating 10 Malaysian companies with a revenue of USD1 billion and 100 Malaysian companies with a revenue of RM1 billion in the next decade. I think this should be the core objective.
The government has this ambition because we understand that we have built up this ecosystem, supply chain, and capabilities over the last 50 years in Penang and throughout Malaysia, yet we have not seen a Samsung, TSMC, or similar companies on the global front, particularly when we compare ourselves with South Korea and Taiwan.
Professor Keun Lee, a Distinguished Professor of Economics at Seoul National University, famously talked about this comparison — to compare Penang/Malaysia with Taiwan, Shenzhen, and South Korea. Penang actually started some of the semiconductor manufacturing activities much earlier than some other places, but until today we have not created a “Team Malaysia”.
This is partly because, perhaps, the Malaysian semiconductor industry is very intertwined with the global supply chain and is therefore doing well without the need to look at creating “Team Malaysia”. However, this is the time for us to do things differently.
We are now facing a once-in-80-years shift globally.
You don’t need me to tell you what is happening. Every day, you read the news, there are new things happening, and new announcements by the US President. But for many people who think that this is very new, I say perhaps this started with the 2008 global financial crisis, followed by the first Trump administration. And in terms of trade, actually, the Biden administration followed very closely what the first Trump administration had implemented.
And we are now coming to a major shift globally. Trade will become different. We used to think that one single global supply chain was the best trade model. This is ending.
There will be multiple regional supply chains. There may be even conflicting blocs that don’t necessarily want to work with each other. So we have to find our space.
We in Malaysia, especially in Penang, have to build on our strength and build on what we can offer to the world, what we can offer to different supply chains, and how to navigate this both as a government and as business entities, and as a people. We need to do things differently, and I applaud you for what you’re doing today.
One of the key changes that we want to initiate is also more horizontal crossing. Our semiconductor industry in Malaysia, particularly in Penang, is very well connected globally, but a lot of those connections are vertical connections. What do I mean by that?
In May 2023, I was in Detroit attending the APEC Ministerial Roundtable Meeting on behalf of the Government of Malaysia and on behalf of my Minister. The then US Secretary of Commerce, Gina Raimondo, told the meeting that during the lockdown caused by the Covid-19 pandemic where Malaysia shut down the factories, General Motors and some other US manufacturing activities in the US had to shut down because Malaysia produced 30% of the global share of automotive chips. However, the automotive industry in Malaysia, for example, Proton and Perodua, don’t produce their chips or create their IC design here. So we have a very strong semiconductor sector, but the semiconductor sector is not horizontally linked to the automotive, defence industry, medical devices, or agricultural sectors locally.
ViTrox is starting something in agriculture, Pentamaster is building its own medical devices manufacturing plant. But what we want to do is to work with you to build synergy to build horizontal crossing and to create a lot more Malaysian Intellectual Properties and Malaysian technology.
Our aspiration is not to chase the cutting edge technologies.. What we want to do is fortify Malaysia’s position as the indispensable middle. That means our semiconductor industry and all other industries powered by our semiconductor technology must be able to fortify a middle position where we are not chasing top technology but where we are very strong in the middle. We can work with the European bloc, US bloc, and China bloc, where we provide excellent technology and create Malaysian technology. That’s our hope.
We are hoping that this shift in the semiconductor sector can create horizontal linkages and create Malaysian technology so that we no longer just use technology but actually create our own technology and our own IP. And who do we serve? Globally, as I say, we are seeing a major shift, and in this global shift, we have to expect that at some point, the US may wall itself up and say, “Okay, you cannot export so many things to me”. This may happen. You are already seeing the signs. As I said earlier, we want to fortify our position as the indispensable middle. We still work with multinationals, but we also want to create our own technology and our own IP so that we can serve the world.
The world is a very different place now. Fifty-five years ago, Brazil’s economy wasn’t that rich and you would not expect a rising India. And even 10 years ago, you would not imagine that Saudi Arabia was seriously trying to build a semiconductor sector. But now, they are all building their own semiconductor industries. So we want to create a “Team Malaysia” which will allow us to work with Saudi Arabia, India, Brazil, and many other nations that want to build a semiconductor sector.
I just returned from India on Saturday. I spent a week there talking to different organisations, including the Indian Electronics and Semiconductor Association (IESA), Indian Chemical Council and FICCI (Federation of Indian Chambers of Commerce & Industry), which is their national chamber. What we are hoping to do is create a semiconductor collaboration so that Malaysian capabilities — especially those working with multinationals in Penang and in Malaysia, the same companies investing in India — can be part of a trilateral relationship. We hope to work with them and serve them in the “Team Malaysia” format.
These are things that we are hoping to do together with you. And I really think what you are doing today is fantastic. You are creating local synergy, but more than that, you are creating a template for a united “Team Malaysia”. We want to approach the world in this global shift as “Team Malaysia”, and we want to present the world with all your capabilities. We don’t just want to be known as a trading nation; we want Malaysia to be
known as a technology nation.
Thank you.