By Zurinna Raja Adam, Business Times

July 7, 2010

MALAYSIA, which is currently among the world's leading sites for semiconductor assembly and testing, wants to strengthen the industry by promoting value-added activity and enhancing the supply chain.

This means promoting the evolution of the electronics industry from being a maker of computers and notebooks to one that produces higher value-added products like blu-ray players, high-definition flat screen televisions and e-book readers, among others.

The two promoted growth areas to support this progress are semiconductor support services and high brightness light emitting diode activities.

This includes both front and back end activities like wafer fabrication, integrated circuit (IC) design, assembly and testing and other support services like burn-in testing, test board and wafer probing and testing.

Malaysian Industrial Development Authority (Mida) director general Datuk Jalilah Baba said renewable green technology is another priority industry that has a growing demand.

"In the last 40 years, Malaysia has developed a strong industrial base across the entire semiconductor value chain populated by local players and multinationals like Intel, Renesas and Spansion," she said in Kuala Lumpur during a media briefing recently.

Last year, the number of approved electrical and electronics projects totalled RM4.7 billion, down from RM17.8 billion projects approved in 2008, mainly due to the global economic crisis.

Jalilah said Mida continuously promotes Malaysia as a global destination for the semiconductor industry, due to the strong support provided by government like incentives, the availability of industrial estates, manpower and training institutions that churn out graduates in related fields.

"Mida offers very favourable environment with both financial incentives and operational support," she adds.

The semiconductor industry in Malaysia is supported by 62 companies of which 28 companies are involved in semiconductor, seven in wafer fabrication, 27 in IC design and 11 are Malaysian-owned projects like wafer-foundry group Silterra Malaysia Sdn Bhd.