KUALA LUMPUR: Malaysia’s semiconductor industry, which takes up 13 % of global chip assembly and testing market share, is set to benefit from the United States CHIPS and Science Function.
An acronym for Creating Helpful Bonuses to Produce Semiconductors plus Science Act, the Act commits more than US$280 billion (US$1=RM4. 44) in federal funding which includes US$52. 7 billion in subsidies to support semiconductor production and study in the US.
Malaysia Semiconductor Business Association (MSIA) leader Datuk Seri Wong Siew Hai stated under the Act, which President Joe Biden signed on August 9, 2022, the particular world’s largest economic climate is expected to develop state-of-the-art chip manufacturing (fab) plants with process technology of seven nanometres or even below.
“If they build more leading-edge fabs like this in the US, they will require more assembly plus testing services, because the current capacity will never be enough to cater to the new fab capacity.
“From that will perspective, Malaysia would benefit because the country is still one of the most appealing and competitive places for investment compared to other Southeast Asian countries.
“This will be attributed to the country’s 50 years of market experience, business-friendly authorities, good infrastructure and talents, as well as an English-speaking workforce, ” he told Bernama when contacted.
Asked if the Work would affect Malaysia’s fabs’ competitiveness, Wong shrugged off the problem as he said currently, there are only two fabs with much less leading-edge technology in the country.
“Basically, Malaysia will not be affected in any way as we do not have the particular cutting-edge fabs, so we do not compete in this field, ” he said.
While new-technology is anticipated to end up being transferred to the assembly plus testing segment adopting the establishment of new fabs in the US, Wong wished the government could incentivise companies in Malaysia to help them grow in order to compete with the Southeast Asian peers.
Meanwhile, he or she said instead of consistently focusing on strongholds such as assembly and assessment as well as automation solutions and equipment locations, the government should create efforts to attract more fab assets into Malaysia, as much firms had started to design integrated circuits.
Touching on competition, Wong expressed concern over the 15 per cent global minimum tax (GMT) reform which is expected to be applied globally next year.
The GMT can be aimed at ensuring multinational companies (MNCs) spend the right amount of taxes, no matter where they operate.
Inland Income Board chief executive officer Datuk Mohd Nizom Sairi was recently documented as saying that Malaysia had agreed in principle to carry out the tax regime on certain MNCs.
“How do we attract a lot more investments when each country is offering 15 per cent corporate taxes, ” Wong said.
Moving forward, he or she cited an commercial market forecast as saying that global complete semiconductor sales are expected to rise at a substance annual growth rate of 7. 1 per cent over the following five years.
“That could be driven by higher demand from industries like automotive, cloud processing, 5G, aerospace, medical devices and artificial intelligence, ” this individual said. – Bernama