Malaysia will step up efforts to address backlog orders in the semiconductor industry

Malaysia is working hard to alleviate the backlog of orders in the semiconductor industry caused by the disruption of operations in the previous 12 months as a result of the Covid-19 pandemic lockdowns.

Many factories in Malaysia and other countries were forced to shut down or operate at reduced capacity as a result of the lockdowns.

The shortages, which mostly affected integrated circuits (ICs) components, were exacerbated by global changes that reduced supply flows over time.

This includes fires and droughts at fabrication plants in Japan, the United States, and Taiwan, as well as the Suez Canal event in March of this year, when a container ship was horizontally trapped and hindered traffic flow for nearly a week on one of the world's busiest trade routes.

Datuk Seri Wong Siew Hai, president of the Malaysia Semiconductor Industry Association (MSIA), said that because Malaysia plays such a significant role in the global semiconductor supply chain, it is critical to expand the sector's capacity in light of the severe global shortage of integrated circuits.

He mentioned that the government has permitted enterprises to reopen at full capacity when 80 percent of staff have been properly vaccinated, which has relieved some of the pressure on satisfying customer demands.

“We thank the government for recognising that electric and electronics (E&E) is an important service sector, and we are working around the clock to ship as many products as possible as a result of the current announcement.

“We also see more companies getting their personnel vaccinated,” he told Bernama. “Based on our poll, some companies are investing more and hiring more people to increase their productivity because orders are relatively high,” he said.

According to the study, 16 companies claimed they will invest more than RM4 billion in capital expenditure over the next two years, increase their built-up area by 3.4 million square feet, and add 4,600 new positions.

Meanwhile, according to industry data, global demand for ICs is expected to climb by 20% this year and another 10% in 2022.

Meanwhile, the Semiconductor Equipment Manufacturers Industry (Semi) announced that global semiconductor equipment billings increased by 48 percent year-over-year (y-o-y) in the second quarter of 2021, reaching a new high of US$24.9 billion (RM103.55 billion).
This was a 5% rise over the previous quarter.