Semiconductors are an essential component in a broad range of electronic products used daily. Without semiconductor chips, modern electronics would not exist.
The semiconductor industry has experienced remarkable growth over the past two decades. According to the Semiconductor Industry Association, a US-based trade body, global semiconductor sales skyrocketed more than 300 per cent – from US$139 billion in 2001 to US$573.5 billion in 2022. This upward trend is projected to continue, with an estimated 56 per cent increase by 2030. The demand for semiconductors in enterprise-driven sectors such as digital infrastructure, which requires greater computing power, will be the driving force behind this growth.
Yet, as the industry grows, the global semiconductor industry is facing several challenges requiring immediate attention. Securing factory spaces, finding skilled talents, navigating the geopolitical environment, and participating in the highly collaborative value chain have increasingly become pressing concerns.
Penang – a major player in the global semiconductor network
The entire semiconductor value chain is a complicated one that involves thousands of suppliers. The global manufacturing chain is also highly diversified, and involves different companies such as Fabless companies, Foundries as well as Outsourced Semiconductor Assembly and Test (OSAT) companies.
Southeast Asia has emerged as a major player in this interconnected network with its long-standing history of semiconductor production dating back to the 1970s. Malaysia, in particular, celebrated the 50th anniversary of its Electrical and Electronics (E&E) industry in 2022. Malaysia’s E&E exports saw an impressive compound annual growth of 16 per cent over 50 years. Recognising the significance of the industry, the Malaysian Government has placed strategic focus on initiatives to help the country move up the semiconductor value chain from back-end assembly to front-end design.
Important notice and disclaimers
This article shall not be copied or relied upon by any person for whatever purpose. This article is given on a general basis without obligation and is strictly for information only. The information contained in this article is based on certain assumptions, information and conditions available as at the date of the article and may be subject to change at any time without notice. You should consult your own professional advisers about the issues discussed in this article. Nothing in this article constitutes accounting, legal, regulatory, tax or other advice. This article is not intended as an offer, recommendation, solicitation, or advice to purchase or sell any investment product, securities or instruments. Although reasonable care has been taken to ensure the accuracy and objectivity of the information contained in this article, UOB and its employees make no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability for any error, inaccuracy, omission or any consequence or any loss or damage howsoever suffered by any person arising from any reliance on the views expressed and the information in this article.
Terence joined UOB Singapore in 2010 to lead the Bank’s coverage of the Telecom, Media and Technology (TMT) sector, in the Corporate Banking Overseas function, which covers the ASEAN and Greater China markets. Since 2017, in his role as Managing Director, Head of TMT, Sector Solutions Group, Terence is responsible for developing sectoral focused value chain solutions for corporate and enterprise clients.
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