Malaysia poised to challenge Taiwan in semiconductor manufacturing?

Skill shortages present challenges to Malaysia's growing semiconductor sector

12 Apr 2024 05:06pm
Photo for illustration purpose only. - Photo by 123RF.
Photo for illustration purpose only. - Photo by 123RF.

SHAH ALAM – Malaysia is emerging as a key player in the global semiconductor industry, seen as an alternative to the dominant but vulnerable Taiwan Semiconductor Manufacturing Company.

According to media reports, Taiwan's position is susceptible to disruptions from geopolitical tensions and natural disasters.

In 2023, Penang garnered a significant $12.8 billion in foreign direct investment (FDI) from the semiconductor sector, outpacing the total FDI of the previous seven years.

Notably, Intel has announced a $7 billion investment in a new manufacturing facility in Penang, as reported by the World Economic Forum.

Prime Minister Datuk Seri Anwar Ibrahim, in a discussion with the Financial Times, highlighted that advancing the semiconductor industry is a crucial objective for Malaysia.

He praised the efforts to attract high-tech investments like Infineon's new silicon carbide factory in Kulim, Kedah.

These initiatives align with Malaysia’s National Investment Aspirations (NIA) and the New Industrial Master Plan.

However, the industry faces significant hurdles, particularly a shortage of skilled workers, which poses a threat to Malaysia's role in the global semiconductor supply chain, primarily based in Northern Malaysia and Penang.

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With major companies from Europe and the United States expanding their operations, Malaysia is positioning itself as a rising market for semiconductors.

What is a semiconductor chip?

A semiconductor chip is a material that sits between a conductor and an insulator, managing the flow of electricity in devices. It's a crucial component in various electronic devices, including computers and solid-state storage.

What are the two basic types of semiconductors:

  • N-type semiconductors have many free electrons and higher conductivity.
  • P-type semiconductors have fewer free electrons and lower inductance.

Examples of semiconductor technology:

  • Diodes allow electricity to flow in one direction and are used in power supplies and lighting.
  • Transistors function as switches or amplifiers and are essential in digital electronics.
  • Microprocessors combine a CPU and memory, acting as the brains of devices like computers and smartphones.
  • Solar cells convert sunlight into electricity using semiconductor materials such as silicon.
  • LED lights emit light when electric current passes through them and are used in various lighting applications.

Applications of semiconductors in daily life

  • Computing: Chips in computers and servers power industries from healthcare to logistics.
  • Communications: Semiconductors are in devices from cell phones to satellite systems.
  • Energy: They're used in solar cells and power management systems.
  • Automotive: Semiconductors are found in vehicle control systems and are key in electric and autonomous vehicles.
  • Healthcare: They're used in medical imaging and diagnostic equipment.