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“Market Watch 2012”

Electrical & Electronic Industry in Malaysia

General information about Malaysia

Malaysia is centrally located within the Association of South-East Asian Nations (ASEAN).

Consisting of two regions separated by the South China Sea — the Malaysian Peninsula and the

states of Sabah and Sarawak on the island of Borneo — Malaysia is a federation of 13 states and

three federal territories. The former British colony gained its independence in 1957. Since

Independence, Malaysia has adopted the political system of a parliamentary democracy with a

constitutional monarch whose position is rotated every five years between each of the nine

hereditary state rulers. The political scene has been characterized by an extra-ordinary degree of

political stability and continuity through an encompassing national coalition of political parties.

Its territory comprises approx. 330,000 sq km, four fifths of which are covered by tropical

rainforest. Due to its bio-diverse range of flora and fauna offering excellent beaches and brilliant

scenery, the country is one of the region‘s key touristic destinations. Malaysia is a multi-ethnic,

multicultural and multilingual society with 28.66 million members. Ethnic Malays make up the

majority of the population at 57.1% followed by Chinese at 24.6%, Indian at 7.3% and other local

ethnicities at 11%. The Malaysian constitution guarantees freedom of religion, although Islam is

the largest and official religion. Approx. 61.3% of the population practice Islam, 19.8% Buddhism,

9.2% Christianity, 6.3% Hinduism, and 2.6% practice Confucianism and other traditional Chinese

religions. The official language of Malaysia is Bahasa Malaysia, but English as well as Chinese are

the business languages.

Economical Overview

Malaysia is a dynamic country which is constantly evolving. Being a middle-income country,

Malaysia has transformed itself since the 1970s from a producer of raw materials into an

emerging multi-sector economy spurred on by high technology, knowledge-based and capital-

intensive industries. Malaysia‘s Economic Performance ranking improved to 7th place out of 59

“Market Watch 2012”, Electrical & Electronic Industry in Malaysia

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economies this year compared with 12th position in 2007.1 It is one of the 20 largest trading

nations worldwide and was headed of Taiwan, Sweden, Canada, Australia, the United Kingdom

and Switzerland.2 The World Competitiveness Yearbook 2011 Report released by the Institute for

Management Development (IMD) continued to rank Malaysia as among the top 5 most competitive

nations in the Asia-Pacific region, taking 6th position in the 20 million population category and 2nd

position after Taiwan in the GDP per capita less than US$20,000 category.3 Moreover, the country

is the 21th largest exporter among all trading nations worldwide.

Strategically located in the heart of South-East Asia, Malaysia offers a cost-competitive location

for investors intending to set up offshore operations in order to manufacture advanced

technological products for both regional and international markets. In addition, Malaysia has a

market-oriented economy which is supported by pro-business government policies. Last year, the

Malaysian Government launched the Economic Transformation Programme (ETP) which is

managed by PEMANDU (Performance Management & Delivery Unit) under the patronage of the

Prime Minister.4 The ETP identifies 12 National Key Economic Areas (NKEAs) which are drivers of

economic activities that have the potential to materially contribute to the growth of Malaysia. Its

objective — also known as ―Vision 2020‖ — is to transform Malaysia into a ―high income country‖

by year 2020. The programme will lift Malaysia‘s Gross National Income (GNI) to US$523 billion by

2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank's

threshold for high income nation.5 To achieve the targets set, Malaysia needs an annual growth of

GNI of 6%. There are plans to revitalize Malaysia's private sector, to grow the service sector from

58 to 65% and to create 3.3 million new jobs.6 The Government will also introduce other

transformation plans in 2012.7

In Malaysia, the 2011 GDP growth edged lower to 4.0 percent year-on-year due to a weaker

domestic demand. Further implementation of ETP projects and a RM232.8 billion 2012 Budget

1 “Malaysia’s economy attains 7th position”, New Straits Times, 20th May 2011. 2 Ibid. 3 Ibid. 4 See www.pemandu.gov.my . 5 Forbes.com, 21st September 2011. 6 Ibid. 7 “Malaysia Budget 2012 Main Highlights”, www.financesentral.com accessed on 21st November 2011.


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tabled by Prime Minister Datuk Seri Najib Razak will boost domestic demand, but unlikely to

offset underperformance in net exports.8

Economical Key facts Malaysia9

Currency: 1 Ringgit (RM) = 100 Sen

Exchange rates: 1 EURO = RM4.3; 1 US$ = RM3.2 (17.11.2011)

GDP (billion RM): 2009: 679.94; 2010: 765.97; 2011: 829.34

GDP - real growth rate: 2010: 7.2%; 2011: 4.0%, 2012: 5.0% (est.)10

Inflation rate: 3.3-3.5 % (est. 2012 IMF)

Exports: RM513.59 billion (Jan- Sep 2011)

Exports - commodities: Electronics 34.5%; petroleum & products 9.9%; palm

oil 9.3%; chemical products 6.9%; machinery 3,4%;

manufactures of metal 3.0%; rubber products 2.6

Exports – partners: Singapore 13.3%, China 12.5%, Japan 10.5%, USA 9.5%,

Thailand 5.3%, Hong Kong 5.1%, Germany: 2.7%

Imports: RM424.37billion (Jan – Sep 2011)

Imports - commodities: Electronics 31.2%, petroleum & products 10.1%,

chemical products 9.2%, machinery 8.0%,

manufactures of metal 5.9%, transport equipment

5.1%, iron & steel products 4.3%, optical & scientific

equipment 3.2%, processed food 2.2%, other products

20.8%

Imports - partners: Japan 12.6%, China 12.6%, Singapore 11.4%, USA

10.6%, Thailand 6.2%, Germany 4.0%

Unemployment rate: 3.0% (2011)11

Average wage 2011: Project manager IT: RM8,415, lecturer/speaker:

RM3,459, mechanical engineer: RM3,070, account

executive: RM2,572, plantation worker: RM85012

8 Malaysian Economic outlook by Malaysian Institute of Economic Research (MIER), www.mier.org.my/outlook accessed on 21st

November 2011 & “Malaysia Budget 2012 Main Highlights” (Finance Sentral 2011). 9 Malaysia External Trade Development Corporation (MATRADE), www.matrade.com.my . 10 Malaysian Institute of Economic Research (MIER), www.mier.org/outlook/ accessed on18th November 2011. 11 Bank Negara Malaysia, Economic and Financial Data for Malaysia, last updated on 14th November 2011.


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Population below poverty line: 3,6%13

Bilateral Trade: Malaysia & Germany

Malaysia is EU‘s second largest trading partner inside ASEAN, behind Singapore, with bilateral

trade in goods reaching 31.9 billion Euros in 2010 and the EU‘s 22nd largest trading partner.

Germany enjoys intensive trade relations with Malaysia and is one of the main foreign investors in

Malaysia, while among members of the European Union, Germany is Malaysia‘s leading trade

partner.14 Besides, Malaysia ranks 2nd as a consumer of German products among the ASEAN

countries.

The Electric & Electronic Industry in Malaysia

Introduction to the Electric & Electronic Industry

The strong E&E industry in Malaysia is a result of the Government‘s initiatives to promote labor-

intensive and export-oriented industries. Since the establishment of the first semiconductor plant

in Penang in 1972, Malaysia has become a major global manufacturing hub for the electrical and

electronics industry, as attested by the large number of multinational companies (MNCs) from

USA, Japan, Europe, Taiwan and Korea which have chosen Malaysia as their base. Unsurprisingly,

the E&E sector has grown into Malaysia‘s largest contributor to output, employment, investments

and exports (35% of total exports15)16.

The presence of leading electronic manufacturing services (EMS) companies such as Flectronics,

Solectron, Celestica, Jabil, Plexus and Sanmina-SCI provides opportunities for local companies to

be part of their supply chain in the supply of equipment, materials, parts and components, and

dedicated services such as contract design, burn-in testing, failure analysis and rapid prototyping.

Other local supporting industries focus on activities such as moulds, tools and dies, metal

stamping, surface treatment, plastic injection moulding and M&E (Mechanical & Electrical).

Nowadays, there are more than 50 companies operating as contract manufacturing services (CMS)

or EMS companies.

12 www.payscale.com/research/MY/Conutry=Malaysia/Salary accessed on 21th November 2011. 13 Index Mundi, www.indexmundi.com/g?r.aspx?v=69 accessed on 18th November 2011. 14 http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/ accessed on 21st November 2011. 15 Dato’ Noharuddin Nardin, Chief Executive Officer of MATRADE, trademart magazine, May/June 2011 16 Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013


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The key to sustaining a healthy growth within this key sub-sector is surely automation and

harnessing innovation talents that can take the E&E industry to the next level17.

Major sub-sectors of the E&E industry include

Electronic components

Industrial electronics

Consumer electronics

Electrical products

Top Malaysian companies based on market capitalization in E&E sector

Company Market capitalization in mln US$

Revenue in mln US$

Malaysian Pacific Industries 299 464

Hong Leong Industries 272 933

Panasonic Manufacturing Malaysia 206 175

Unisern 173 370

ETI Tech Corporation 156 25

Table 1 - Top Malaysian companies based on market capitalization in E&E sector18

Malaysia‘s success can be attributed to a winning combination of pull factors: a stable

government, good economic policies, topnotch infrastructure and a skilled knowledge workforce.

As a result, Malaysia has developed significant expertise for the manufacture of a wide range of

semiconductor devices, high-end consumer electronic and information and communication

technology products19. Based on the Malaysian Industry Development Authority‘s (MIDA) records,

from a total of just four companies with 577 employees and a total output value of RM25 million

in 1970, today the E&E industry has expanded to more than 1,695 companies with total

investment of RM108 billion and a workforce of more than 600,000 people20.

Investment-Projects Approved by E&E Sector

Domestic Investment (US$) in mln

Foreign Investment (US$) in mln

Total Proposed Capital Investment (US$) in mln

Jan. - Oct. 2011 419.4 2.450.7 2.870.0

2010 471.2 3.844.9 4.316.1 Table 1 - Investment-Projects approved in the E&E sector

21

17 Dato’ Noharuddin Nardin, Chief Executive Officer of MATRADE, trademart magazine, May/June 2011 18 Bloomberg, December 2010 19 Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013 20 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 21 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011


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Performance of the Electric & Electronic Industry

In 2010, the E&E industry is the leading sector in Malaysia‘s manufacturing sector, contributing

significantly to the country‘s manufacturing output (31%, in 2008: 29.3%), exports (48.7%, in

2008: 55.9%) and employment (33.7%, in 2008: 28.8%).

The gross output in 2010 of the industry totaled RM166.2 billion or US$55.8 billion (in 2008:

RM167.2 billion or US$53.9 billion), exports amounted RM249.8 billion or US$83.8 billion (in 2008:

RM233.8 billion or US$75.4 billion) and the industry created employment opportunities for

336.408 people (in 2008: 296,870) 22.

Chart 2 - Malaysia's export Index in E&E sector (2008 = 100%)

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Siemens, Bosch and Infineon are just some of the well-known companies, who have moved their

production to Malaysia. Based on a statement by The German Electrical and Electronic

Manufacturers‘ Association (ZVEI), Asia will stay the growth region of the future, with China

leading the pack. Smaller nations like Malaysia will get their fair share of this development if

they continue to offer economic and political stability.

The industry has moved up the value chain into the manufacture of high-end products and has

moved away from labour-intensive to more capital-intensive operations. The capital investment

per employee (CIPE) ratio showed a growth from RM79,149 per employee in 1995 to RM333,830

per employee in 2000 and RM578,469 per employee in 2007. These include intensification of

research and development efforts and outsource non-core activities domestically.

22 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 23 OCBC Bank, www.ocbc.com, 20.12.2011

0

50

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150

Jan

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Jul-

09

Sep

-09

No

v-0

9

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-10

Mar

-10

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Jul-

10

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v-1

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Malaysia Export of E&E by Index (Sep. 2008 = 100), OCDC Bank


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Malaysia’s Exports and Imports in the E&E Sector

Diagramm 1 - Malaysia's Exports to World by Product (HS Code) in mln US$ and %Change

\

Diagram 1 – Malaysia’s Imports and Exports of E&E Products24

85XX Electrical machinery and equipment and parts thereof; sound recorders and reproducers,

television image and sound recorders and reproducers, and parts and accessories

8517 Telephone sets, including telephones for cellular networks or for other wireless networks

8527 Reception apparatus for radio-broadcasting

8528 Monitors and projectors

8529 Parts suitable for use solely or principally with the apparatus of headings 85.25 to 85.28.

8534 Printed circuits.

8536 Electrical apparatus for switching or protecting electrical circuits

8537 Boards, panels, consoles, desks, cabinets and other bases

8541 Diodes, transistors and similar semiconductor devices

8542 Electronic integrated circuits.

8543 Electrical machines and apparatus

Table 2 - HS Code as use in Diagramms above

Electronics Sector

Accounting for almost 90% of the E&E industry in Malaysia, the electronics sector is the main

contributor to Malaysia`s gross domestic product (GDP) growth. More than 1.600 companies have

emerged within the electronics industry, encompassing three broad subsectors i.e. electronics

components, consumer electronic and industrial electronics25.

24

WTA, World Trade Atlas, 05.01.2012 25

Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013


8

Diagram 2 - Malaysia's production of Electronics 2005-2010 in mln RM26

Figure 1 - Malaysia's Exports of Electronic Products in 2010 in Million RM27

Over the years, Malaysia's electronics industry has developed significant capabilities and skills for

the manufacture of a wide range of semiconductor devices, high-end consumer electronic and

information and communication technology (ICT) products. International Trade and Industry

Minister Datuk Seri Mustapa Mohamed said upon realization of the already signed memoranda

following the 10th Malaysian plan, the partnerships had the potential of generating RM1.9bil in

investments over the next five years and creating 6,500 new jobs by 2020.

Electronic Components

The electronic components are the most important sub-sector and accounted for 44.6 per cent of

the total investment approved in the electronics sector in 2010.

Within the electronics components subsector, semiconductor devices are the largest contributor,

comprising more than 30% share of the E&E exports. Malaysia is currently the world‘s leading

location for semiconductor assembly and test operations, with more than 70 mostly multinational

companies (MNCs) specialising in these devices28

. Semiconductor products constituted of export

26

Yearbook of World Electronics Data Volume 2 2011 27 Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013 28 Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013

0

50000

100000

2005 2006 2007 2008 2009 2010

Malaysia's production of Electronics in mln RM

Computing Industrial Communications Consumer Components

105500

93300

25800

Malaysia's Exports of Electronic Products in 2010 in mln RM

Electronic components

Industrial electronics

Consumer electronics


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value RM97,856.5million (US$32,837.75million). It contributes 92.7 per cent of the total export of

electronic components or 43.6 per cent of the total electronics export for 201029.

Although the manufacture of semiconductor devices and electronic components sector still

dominates the E&E industry landscape, clear changes have been observes in its composition.

Semiconductor companies have moved beyond basic operations such as assembly, testing and

packaging of semiconductors to high value-added activities such as cutting and polishing of silicon

wafers, IC design and wafer fabrication. The global trend in the segment has led to many

semiconductor companies undertaking specialisation and adopting new technologies such as

nano-technology in their manufacturing processes.

The present of many large MNCs has also created another positive trend: a very sizeable local

market for components and supporting/ancillary industries. There now exists a strong network of

inter- and intra-industry linkages in the electronics industry. Since the inception of the Industrial

Linkage Programme in 1997, a total of 170 small and medium-size local companies have forged

linkages with larger companies and MNCs, notably in the areas of electronics, machinery,

fabricated metal products and engineering support industries. Another rising trend is the

emergence of local companies that form part of these MNCs supply chain. Currently at least 50

companies operate as contract manufacturing services (CMS) or electronic manufacturing services

(EMS).

In other words, the electronics sector is shifting into higher value-added products and activities,

which make sense, in the light of rapid globalisation and increasing cost pressures. Many MNCs

have already upgraded their operations into integrated manufacturing centres (IMCs), which fuse

the manufacturing concept with research and development, product design and development,

marketing and distribution activities30.

Industrial Electronics

This sub-sector consists of multimedia and information technology products such as computers,

computer peripherals, telecommunication products and office equipment. The Industrial

electronics sub-sector accounted for 24 per cent of the total investment approved in the

electronics sector in 2010. In 2010, the majority of the investments approved amounting to RM2.6

billion were from Electronic Manufacturing Services (EMS) companies producing low volume high

29 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 30



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mix products for various applications such as medical, aerospace, oil and gas and

telecommunication31

.

Consumer Electronics

Malaysia‘s consumer electronics devices market, defined as the addressable market for

computing devices, mobile handsets and AV devices, was projected at about US$10.7mln in 2011.

This is expected to increase to US$13.5bn 2015, driven by rising incomes and growing

affordability of key products. Demand will grow at a CAGR of about 6%, as Malaysian consumers

regain confidence. Economic growth will moderate in 2011 and 2012, but overall Malaysian

spending on consumer electronics will remain robust in key product segments such as LED TV

sets. Malaysia also emerged in 2010 as one of the fastest-growing regional smart phone markets.

Vendors will continue to target products innovation to drive revenues, with growth areas

including smart phones, notebooks and HDTV32.

The leading companies are now undertaking R&D activities in the country to support their global

and Asian markets. Exports of consumer electronic products in 2010 amounted to RM25.8 billion

(USD8.7 billion)33.

Multinational companies such as Apple Computer Systems Malaysia, Samsung Malaysia Electronics

and Canon Marketing continued to have a stronghold on consumer electronics in Malaysia. Due to

their strong brand equity, they were able to record high value growth. In addition, the sheer

amount of competition between these companies has driven down prices, making consumer

electronics more affordable than ever before34. Offering consumers the benefit of in-store

customer service as well as the opportunity to preview products before buying, specialist

retailers such as Senheng Electric and Harvey Norman continued to be the preferred distribution

channel for consumers. Senheng Electric in particular has been successful due to the rapid

expansion of its outlets across the country. Increasing affluence will ensure that more consumers

are able to afford to buy consumer electronics. Reaching new levels of convenience and

entertainment, products such as cameras and smartphones will continue to see strong growth.

31 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 32 http://www.researchandmarkets.com/reports/1885013/ 33 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 34 http://www.euromonitor.com/consumer-electronics-in-malaysia, 05.01.2011


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However, goods such as DVD players and camcorders are predicted to experience a slowdown in

demand as their functions have been superseded by newer technologies.35

Air Ventilation devices are expected to account for about 10% of Malaysian consumer electronics

spending over BMI‘s fiveyear forecast period. Malaysia‘s domestic AV device market is projected

at US$905mn in 2011. The market is expected to grow at a CAGR of 4% between 2011-2015, to a

value of US$1.1bn in 2015. In 2010 LED backlit models in the 40- and 42-inch range were popular,

fuelled by promotions from retailers. Malaysian mobile handset sales accounted for about 65% of

Malaysian consumer electronics spending in 2010. Malaysian market handset sales are expected to

grow to 9.0mln units in 2015, as mobile subscriber penetration passes 124%. Growth will be

slower than in the preceding five years due to slowing subscriber growth, but opportunities in

Malaysia‘s youthful market will be driven by demand for smart phones, which in 2011 could

account for two thirds of Malaysian handset sales36.

Electrical Sector

Dominated by domestic companies, the electrical sector began in the 1960s as a solution to

reduce the imports of household appliances, electrical fittings, wires and cables and automotive

batteries37.

Broadly speaking, the electrical sector can be classified into three main subsectors: electrical

industrial equipment, electrical components and electrical consumer. Notable growth is seen in

the sector of the electrical consumer products, once the domain of foreign-owned, especially

Japanese, companies. Increased investment in R&D centers has paid off handsomely: Malaysia is

now one of the world‘s largest exporters of home air-conditioners. Malaysian brands such as

Pensonic, Khind, and i-Berhard have become household names not only locally, but also in the

ASEAN region and the Middle East. Local company, OYL, also a major exporter of air-conditioners,

exports over 50% of its production to Europe, USA, Australia, the Middle East and Africa and also

serves as an OEM for MNCs and ODM for reputable brands like York, Fedders and Lennox. There

are also many local contract assemblers who produce consumer appliances for big-name foreign

brands such as LG, Electrolux, Kelvinator, GE, Elba and Samsung38.

35 http://www.euromonitor.com/consumer-electronics-in-malaysia, 05.01.2011 36 http://www.researchandmarkets.com/reports/1885013/ 37

Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013 38



12

Figure 2 - Malaysia's Exports of Electrical Products in 2010 in mln RM39

The major electrical products produced are household appliances such as air-conditioners,

refrigerators, washing machines, vacuum cleaners and other electrical appliances. There are

presently more than 381 companies producing a wide range of products such as household

electrical appliances, wire and cables and electrical industrial equipment. These are mainly local

companies such as Pensonic, Leader Cable and Tenaga Switchgear. Manufacturing activities in the

electrical industry have evolved from mere assembly to design and marketing of ‗local' brands for

the regional and global markets. The capital investment in this sub-sector amounted to RM13.2

billion (US$4.4 billion) for the year 201040.

Other sub-sectors experiencing rapid growth are the automotive electrical sub-sector which is

fuelled by the advent of intelligent driving systems. The automotive connectors market is tipped

to be the fastest growing segment in the global automotive electrical products market, expected

to records a compound annual growth rate (CAGR) of over 11% in the 2001-2010 periods41.

Another must-watch segment for automotive electrical products is the automotive batteries

market, which is estimated to account for the market share of 19.8% in 2009, and is the second

largest segment in the automotive electrical products industry42.

Towards greener Technology

Malaysia recognizes the enormous growth potential of the solar energy sector and is putting in

place attractive incentives and support facilities to realize its development. Malaysia is ready to

create a globally competitive solar industry cluster. To date, Malaysia has attracted five foreign

direct investments, worth up to RM13.8bil, to set up solar PV manufacturing facilities in Malaysia.

These include US-based companies First Solar Inc at the Kulim Hi Tech Park (KHTP) and US-based

39

Malaysia External Trade Development Corporation (MATRADE), Electrical and Electronics Directory 2011-2013 40 Malaysian Investment Development Authority (MIDA) www.mida.gov.my, 15.12.2011 41



15100

6000

6100

Malaysia's Exports of Electrical Products in 2010 in mln RM

Industrial electrical

Electrical components

Electrical consumer


13

SunPower Corp in Malacca, the China-based ReneSola in Johor Baru, the German company Q-Cells

in Selangor Science Park 2, and the Japanese firm Tokuyama Corp in Sarawak.

With the current unprecedented increase in fuel costs and the impact of global warming, the

demand for renewable energy and also energy efficient products and systems is booming. With an

estimated growth of 20-25 % per annum, a bright future exists for this sector of the industry.

Realising the potential, the Ministry of Energy, Green Technology and Water is putting special

efforts in the solar energy sector in the country and has launched several programmes such as

Malaysian Energy Efficiency Improvement Programme (MIEEIP) and Centre for Education and

Training in Renewable Energy and Energy Efficiency (CETREE) and the Feed-in Tariff for

renewable energy production. This project is aimed at intensifying the usage of rewable energy

or solar energy as an alternative source of electricity as well as to jump start local capabilities

and development of the solar industry in Malaysia. Since its launching, MIDA and Malaysian Energy

Centre have been collaborating to further promote the industry by identifying major players to

invest in the country.

The first approach is the most intuitive. Large researches show that there are energy saving

potentials up to 80% in lighting, 30 % in ventilation, 10 % in lifts and escalators, 70 % in water and

space heating and 80 % in cooking equipment43. With the ever growing energy costs it is only a

question of time until the investment capital is outpaced by the amount of saved energy costs. In

this context such initial investment can face both risks at once and contribute to both an

economical and ecological advancement.

Performance contracting is an alternative that may help to overcome the barriers of the capital

investment and therefore minimizing the associated risks. It leverages the energy saved for

installing energy efficient equipment and throughout that pays for the capital investment. The

charged energy service company measures and verifies the saved energy costs which will be

shared between the owner and the company to payback the project costs. The performance

contract runs until the total payback of the initial project costs.

These two ways underline the growing possibility and ability of Malaysian electrical & electronic

companies to face two contrasting problems at once. But besides facing difficulties they create

knowledge and experience for the growing global key market in the future.

43

The Electrical and Electronics Association of Malaysia, http://www.teeam.com/


14

Outlook

With a sterling track record of nearly four decades, the future of the E&E industry in Malaysia

looks bright. Industry players involved in both the front-end and back-end of the semiconductor

supply chain informed encouraging demand trend. The overall demand for solid-state drives is

very promising and based on the growing needs of the enterprise solid-state drive industry, as

well as consumer solid-state drive devices. Flash memory applications such as secure digital

cards, USB flash drives and MP3 players will continue to be the drivers of growth. The country has

the intellectual and physical resources to provide for its continuity, evidenced by the ever-

increasing pool of MNCs who have shifted their key products, processes and other manufacturing

related activities from their home bases to Malaysia, as well as the many success stories of local

companies44.

Figure 3 - Malaysia's Market Development and Forecast in E&E Subsectors in mln US$45

44


Yearbook of World Electronics Data Volume 2 2011

1

10

100

1000

10000

100000

2007 2008 2009 2010 2011 2012 2013

Malaysia Market development and Forecast by E&E Subsectors in mln US$, Yearbook of World electronics Data, Volume 2, 2011

Electronic Data Processing Office Equipment Control & Instrumentation

Medical & Industrial Communication & Radar Telecommunications

Consumer Components TOTAL


15

Important Malaysian Electrical & Electronic Trade Fairs 2012

Contact:

Mr. Thomas Brandt at: [email protected]

Ms. Chuah Sue Wei at: [email protected]

We hope the market report serves you with actual information on the Malaysian market. Our

core business is to establish contacts, finding distribution partners, project acquisitions, etc. our

“Office-in Office” will give you a permanent address to develop the market. Please contact us

for further information.

NEPCON Malaysia

Date: 12th – 14th June 2012

Venue: Penang International Sports Arena (PISA)

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