Penang and Silicon Valley
Penang’s association with Silicon Valley goes back a long way since 1972. In fact, Penang was the first offshore site for Silicon Valley companies like Intel, AMD, HP, National Semiconductor. These pioneers together with hundred more MNCs who invested in Penang, have helped Penang to earn the nick name of Silicon Valley of the East, and the E&E industry in Penang contributed 38% of the total Malaysia exports.
Over the last 48 years, the MNCs had helped to grow a deep bench of local talents and nurture many successful local companies.
On IC assembly and test manufacturing and automation, the LLC and SMEs are playing an increasingly important role on a sector used to dominate by MNCs. Some of the local SMEs which started off being suppliers to the MNCs have grown into large, listed entities which can conduct their own research and development, and venture into new markets abroad. Some of the more well-known names include Vitrox, Inari Amerton, Pentamaster and the recently listed Greatech.
Progress has also been made in the Integrated Circuit R&D side where there are a few homegrown companies, started by formal employees of MNCs, providing IC design services to MNCs in Malaysia and abroad. Through the high-quality services that they provided, these companies are building their reputation in the industry, and gaining momentum to give the larger global players a good run for their money. The only drawback is that these companies are providing services and are not building any technology or filing their own patents in Malaysia and abroad.
A E&E industry veteran uses the car industry to compare the progress of Malaysia E&E industry. According to him, over the last 48 years, Malaysia has built a strong and deep expertise in assembly and test and automation, just like having the ability to build cars of any complexity. In recent years, there are start-ups who are providing IC design services which is analogized to the pit team supporting F1 races. It is important for Malaysia to have direct participation in the F1 race where we are competing with our own IPs and IC products.