- Strength of the transistor habitat provides a good foundation for the development of new capabilities
- It is crucial to encourage designers to rise as owners in order to foster innovation.
As technology evolves, Malaysia is positioning itself at the vanguard of profound software, a business promising long-term growth and innovation. But, startups and investors alike continue to face a significant problem as they try to commercialize deep systems. Ir. speaking at the monthly MBAN Forum next year. Dr Bernard Lim, vice president of MBAN Penang, highlighted the potential of serious technology, while also managing expectations for buyers.
Malaysian Business Angels Network is abbreviated as MBAN.
Understanding strong technical
Deep software, or heavy technology, is different from standard technology startups models where innovation revolves around business models and consumer-facing applications. Strong technology on the other hand, focuses on medical advances and engineering-driven options. Startups in this space work on disruptive technologies such as artificial intelligence ( AI), blockchain, biotechnology, and advanced computing, which require long research and development ( R&, D) cycles before delivering commercial returns.
” The gestation period is longer”, Lim emphasised. It’s not just about coming up with an idea and putting it into action. In heavy software, you need major R&, D, testing, prototyping, and constant elegance before even thinking about marketplace entry”.
Long birth period, large investment challenges
Deep tech’s lengthy gestational cycle and difficulty provide unique challenges. Companies in this industry usually need a few years to introduce their products. Unlike technology companies, which can run fast, deep technology solutions involve equipment development, extensive research, and stringent regulatory compliance, particularly in sectors such as healthcare and biotechnology.
Buyers, especially those expecting quick results, need to change their perspective when dealing with deep-tech companies. As Lim noted,” Do n’t expect a three-year return. You may wait five to eight times, and in health industries, it might take even more”.
This prolonged timeline, coupled with higher cash requirements, creates major barriers to entry. Investors must be persistent and have a thorough understanding of the complex industrial processes involved.
Malaysia’s place in the semiconductor business
Malaysia’s solid foundation in the silicon industry is one promising place. Since entering the world semiconductor industry in 1972, the state has grown to become the sixth-largest producer of electronics. Lim said that by 2030, the global semiconductor market could reach US$ 1 trillion globally ( RM4.21 trillion ).
Despite a momentary decline in the market following Covid-19, demand for electronic parts is expected to recover, driven by advances in high-performance technology, artificial intelligence, and consumer technology. Malaysia’s existing semiconductor ecosystem offers a strategic advantage for deep tech startups, particularly those focused on hardware.
Penang: The Silicon Valley of the East?
Penang is emerging as Malaysia’s hub for deep tech innovation. The state has for decades been at the forefront of Malaysia’s semiconductor sector, often referred to as the” Silicon Valley of the East.” With a rich pool of engineering talent and an established manufacturing infrastructure, Penang is well-positioned to lead the country’s deep tech charge said Lim.
However, challenges remain. As Lim noted, many engineers in Penang have traditionally worked in factories, focusing on production rather than entrepreneurship. ” Many engineers in Penang have spent years in factories, focusing on production, but what we need now is for them to take the leap into entrepreneurship, to lead their own startups and drive innovation in the ecosystem”.  , Encouraging these engineers to take this leap is crucial for the ecosystem’s growth, he asserts.
Collaboration and the development of the ecosystem
Another encouraging development is that Malaysia’s deep tech ecosystem is no longer limited to Penang. Selangor and Sarawak, along with projects like the Selangor IC Design Park and Sarawak’s growing interest in integrated circuit design, are also making progress. These initiatives aim to expand the nation’s capabilities in semiconductor and deep tech, encouraging cooperation among states.
Although the road to deep tech success may be difficult, Malaysia is well-positioned to capitalize on the upcoming wave of technological advancements with its expanding expertise in semiconductors and a push for innovation across multiple states. We hope to eventually imitate Silicon Valley and expand as quickly as possible. That’s our wish. And longer term, we aim to expand the deep tech ecosystem throughout Malaysia”, said Lim.