Industry leaders and fund managers gathered recently at the WOU main campus to discuss the impact of the US-China geopolitical tensions and accompanying opportunities for Penang to develop its technology industry.
The ‘Conversations with Thought Leaders’ event was organised by WOU’s George Town Institute of Open and Advanced Studies (GIOAS) on 7 July 2023. It kicked off with a presentation to over 30 attendees by Tan Sri Andrew Sheng, Chairman of GIOAS, titled “Global Semiconductor Industry Geopolitical Impact: Tech opportunities in Penang”.
The global semiconductor industry, he said, is a USD500 billion business annually, thus signifying the importance of the tech industry to Malaysia and Penang.
He said that US is a longstanding leader in semiconductor design. “There is a huge shortfall of design engineers in US and elsewhere, and we need to reskill workers in the tech sector,” he added. The US has 32% of global semiconductor design engineers that generate 46% of total global revenue while China has 28% engineers that generate 7.4% of revenue. He urged universities in Malaysia to produce not just engineers but skilled workers for the tech industry.
He believed the US containment of Chinese semiconductor and tech prowess is only going to increase, with sanctions, policies, and increasing protectionism. He noted, “US depends on international students. As the US-China tension increases and the Chinese students return to China, US will face a critical shortage.”
Tan Sri Sheng said the US-China tensions have caused an influx of foreign direct investments into Malaysia, elaborating, “More influx of production will face shortage of engineers and skilled labour.”
He shared that Penang’s semiconductor industry has grown to an ecosystem of more than 3,000 local tech companies and 350 MNCs, and the state has the highest share of manufacturing contribution to GDP. “Penang has the best ecosystem to develop the tech industry, but it does not have that much talent,” he stressed.
Dato’ PY Lai, Chairman of GEM and former President of Motorola China, spoke of setting up the Blue Chip Venture Capital Fund to spearhead the IC design industry in Malaysia. He said Malaysia can become a strategic partner and help build the semiconductor and technology facilities for China, which in turn will help develop Malaysia’s IC design industry.
Dr William Fung, Deputy Chairman of Fung Group, said that consumers dictate the chip market, with consumers mainly coming from US and China.
He said that tariffs and protectionist policies imposed on China are based on the concept of country of origin. He suggested, “How do we make a product ‘made in Malaysia’ instead of ‘made in China’, by value-adding in Malaysia?”
He observed that Penang’s comparative advantage lies in building a sustainable ecosystem through financing and skilled talents because of its small consumer market.
Dato’ Loo Lee Lian, Chief Executive Officer of InvestPenang, said priority is given to investments and projects that promote IC design in the semiconductor industry. “But we need talent. We are continuously engaging the universities to make them understand industry needs,” she said.
Dato’ Seri Wong Siew Hai, President of Malaysia Semiconductor Industry Association, proposed for the government to allow the foreign students studying in Malaysia to work two to three years in the country after completing their degrees, to bridge the talent gap.
