Switching on Malaysia’s US$10 Billion Opportunity for Equitable Growth in the Semiconductors industry

Technology has long been celebrated both as an engine of growth and in transforming life itself. The First Industrial Revolution to the Third Industry Revolution are synonymous with such change; a transformation in global economies powered by machine-driven innovation that led to substantial improvement to the quality of lives around the world. Now, we have a brand-new opportunity to support the most powerful Industry Revolution – the rise of the Fourth Industrial Revolution, or Industry 4.0.Set to transform the way we work with smart, connected technologies becoming mainstream in manufacturing – this new revolution offers an increased level of efficiency through global connectivity, data-driven insight, robotics and the highest level of automations. Now, we are seeing greater levels of productivity with the use of sophisticated software and big data and this will redefine how parts and products are designed, produced, used, and maintained.

Economists have predicted that Malaysia’s electrical and electronics sector will continue to play a pivotal role to drive the economy and the nation can reap the benefits from megatrends such as Industry 4.0, Artificial Intelligence (AI), Machine Learning (ML) and the Internet of Things (IoT). The Industry 4WRD strategy marks a particularly pivotal moment in pushing forward this transition.

The two key elements that we need to prioritise in ensuring the transition towards digitalisation is on the right track include building a conducive ecosystem that looks into processes, structures and execution. Next, is to ensure there exists a fair and equal approach to all opportunities within the semiconductor ecosystem as to form a core part of the original Vision 2020, a proposition championed by then, and current, Prime Minister Tun Dr. Mahathir bin Mohamad. Now, it must once again be at the heart of this new evolution.

Unlocking Opportunities with Semiconductor

Innovation Semiconductor devices form the cornerstone of opportunity for Industry 4.0. These technologies are found in everything from solar panels to the phones in our pockets and even to the chips that monitors our well-being. For instance – healthcare in Malaysia. Government hospitals are usually overcrowded with long queue times. In future, this situation can be improved through the use of automation where accurate prognosis of one’s condition is made possible with innovations in semiconductors that drive miniaturisation of chips used in the next generation of sensors, offering precise and enhanced analysis.

Data centres are the information lynchpins of our modern world. With predictions that data hubs could consume 20% of global electricity by 2025, it is important to note that the next generation of data centres that drastically reduce power consumptions will play an important part in supporting efficient and affordable operations. This is evident through new opportunities in silicon photonics and bandgap technologies that improve efficiency and lower the costs for operators.

Southeast Asia is home to more than 36 million vehicles, yet it is a largely under-developed market for electric vehicles (EVs). This is changing, with nations like Malaysia pushing forward with EV adoption. The country has targeted 100,000 EVs by 2020, with plans to become a marketing hub for EVs by 2030.  Semiconductor material technology and chip innovations will enable more efficient electric vehicles as well as providing next generation sensors and LIDARS to ensure seamless and safe operation of autonomous vehicles.In agriculture, smart farming is enabled by IoT technology and semiconductor innovation. Geomapping, LIDAR technology, robotics and sensors are providing enhanced understanding of agricultural environments and soil conditions, and these will help in optimising crop yields, improving land use, and greatly reducing waste. These solutions are set to play an increasingly important part in Malaysia’s agricultural industry, with hubs such as Sarawak already exploring the substantial opportunity.

It’s Time to Share a US$10bil Opportunity

A 2018 report produced by Microsoft in partnership with IDC projects that digital transformation could add an estimated US$10 billion to Malaysia’s economy by 2021. That can only be done if we work together.One key opportunity in the Industry 4.0 revolution is strategic partnerships in an increasingly complex landscape. This means specialist industry players will need to work closely with the government and amongst each other as to unlock the greatest shared value from a changing ecosystem.

The more cynical amongst us might ask – what’s in this for me? Let me offer my own experience in answer. Partnership in innovation across 12 global customers has enabled CompoundTek to deliver market leading solutions in silicon photonics that position us as one of an exclusive elite group of global operators. Research collaboration has enabled IGSS GaN’s gallium nitride on silicon technologies (GaN-on-Si) to provide the most efficient, compact and cost-effective semiconductor power conversion technology available today. Meanwhile our one-stop-hub semiconductor solutions have developed into rewarding partnerships with synergistic manufacturers here in Malaysia.

The country’s National IoT Strategic Roadmap and Industry 4WRD National Policy are positive steps to nurturing the growth of the semiconductor industry, and certainly in developing a more digitalised nation. I believe that partnerships are the true catalyst in generating opportunities and ensuring its benefits are equally shared. It is about supporting collaboration which enables business to flourish, while building a framework that ensures society can benefit too. Importantly, collaboration magnifies and optimises the funds and resources multi-fold. This vital commitment to mutual benefit, including the catalytic role that Governments have, provides the platform to develop and invest in a holistic infrastructure, framework and policies for a more connected future. Facilitating growth in the right entities and industry champions, and in optimising regional capabilities, will likely dictate the ultimate success of Industry 4.0 for Malaysia.

Written by:
Raj Kumar
Founder and Group CEO
IGSS Ventures