PETALING JAYA: The Malaysia Semiconductor Industry Association (MSIA) is fully supportive of the decision by the government to defer by two years the condition that Malaysians form at least 80% of the workforce in manufacturing companies before companies are allowed to employ foreign workers, as the critical challenge facing the industry is the shortage of workers.
The semiconductor and electrical and electronic (E&E) industry is a key contributor to the Malaysian economy and is a key growth industry to Malaysia. E&E exports grew 18% to RM456 billion in 2021 from RM386 billion in 2020, with E&E generating 56% of Malaysia’s trade surplus. Labour productivity in the E&E sector grew by 12% in 2021 with RM198,437 in value-added per employment, two times the national average of RM90,647.
The E&E industry also received the most investment opportunities in 2021, with 94 approved projects worth RM148 billion in 2021 which will create 28,362 job opportunities. The capital intensity (as measured by Capital Investment Per Employee, CIPE) of the E&E industry of RM5.22 million is the highest among the manufacturing sub-sectors.
These investments by E&E companies in Malaysia signify that there is still a strong demand for semiconductors globally. Supply cannot meet demand. Companies are expanding their existing factories and/ or are building new factories to try to meet the demand for semiconductors. However, the critical challenge facing the industry is the shortage of workers.
A survey by MSIA in November 2021 from 80 of its members concluded that the industry needs at least 30,000 workers immediately. As E&E companies expand their factories or set-up new factories, even more workers will be required.
MSIA president Datuk Seri Wong Siew Hai stated that E&E companies in Malaysia prefer to hire Malaysian rather than hire foreign workers. Unfortunately, there is an insufficient supply of suitable or industry-ready workers in Malaysia, despite the recent increase in minimum wage.
“The E&E industry is doing all it can to hire Malaysian workers by searching for them in the whole of Peninsular & East Malaysia including getting the help of agents,” he said in a statement today.
Currently, the E&E industry is encouraging SPM leavers to join its Academy in Factory programme, where they undergo on-the-job training for 18 months and then achieve a technician certificate on successfully completing the training.
The impact is severe on SME and Malaysian companies, as they are losing workers to MNC with pay increases and these SME had to turn away new orders. MNC will have to move their orders to other sister companies located in other countries, not able to transfer new products & technology to Malaysia and even turning new orders away.
As the E&E industry helps to reduce the semiconductor shortages, the Malaysian economy will be benefit from the growth of the E&E industry.
