Enabling 50 IC Design House In Malaysia

The Issue

It seem impossible to create those number while existing 27 IC Design House by 2020 are in desperation to survive. Then, how can we go through this?

Objective

My writing is about my understanding and what I think can help government to plan on steps to success in this area.

The Industrial Status

Currently there are 27 mixed local and foreign IC design house in Malaysia. Some of them are struggling to survive due to lack of customer. Why? These struggling companies usually have the talent to do things but not the talent to sell them. In addition, Malaysia has no strong local electronics and electrical appliances manufacturer to outsource their design works. While the leaders in design house usually have their own initiative to to sell the products and some create a good networking with strong MNCs.

For the support in this industry, many university has take note on the needs of this sector. They have started to collaborate with MNCs to developed their graduates to be a working graduates. Training centres and plug & play centres are ready to accommodate the industry needs. Local wafer fab is ready to support the production. In short, everything is ready for IC design house to operate in Malaysia.

The Way Forward / Solutions

As we know, there are few strong International design house stationed here in Malaysia. Two key words I'll use are, Pyramid & Networking. How?

Make use of the existing International design house to develop local vendor programme. How this programme can benefit them? For example, The A company is a leader in design house. They may have many demand on their products. With demand, the need to increase their supply. With Increment of the supply, there will be increment in cost (in design, the cost is mostly on licensing and overhead/manpower). How to reduce? Hire a niche local design house for niche product. Later, existing plug & play centre can provide the tools for their operations by projects. If one leader can engage 5 local design house, all we need to get is another 9 to success.

Nick Name

Silicon Valley - Moving Up The Value Chain

Silicon Valley is the southern part of the San Francisco Bay Area in Northern California,United States. The term originally referred to the region's large number of silicon chipinnovators and manufacturers. Despite the development of other high-tech economic centers throughout the United States, Silicon Valley continues to be the leading high-tech hub because of its large number of cutting-edge entrepreneurs, engineers and venture capitalists.

Since the early twentieth century, Silicon Valley has been home to a vibrant, growing electronics industry. The industry began through experimentation and innovation in the fields of radio, television, and military electronics. Stanford University, its affiliates, and graduates have played a major role in the evolution of this area.

It was in Silicon Valley that the silicon-based integrated circuit, the microprocessor, the microcomputer, among other key technologies, were developed, and has been the site of electronic innovation for over four decades, sustained by about a quarter of a million information technologyworkers. Silicon Valley was formed as a milieu of innovations by the convergence on one site of new technological knowledge; a large pool of skilled engineers and scientists from major universities in the area; generous funding from an assured market with the Defense Department; the development of an efficient network of venture capital firms; and, in the very early stage, the institutional leadership of Stanford University.

Although semiconductors are still a major component of the area's economy, Silicon Valley has been most famous in recent years for innovations in software and Internet services. Silicon Valley has significantly influenced computer operating systems, software, and user interfaces.

Eventually, Silicon Valley is known all the high-tech businesses in the area; it is now generally used as a metonym for the high-tech sector. Software, Tools and other IT products are produce here replacing the traditional manufacturing facilities.

(from Wikipedia)

Malaysian Investment Development Authority

On 31 Mac 2010, Malaysian Prime Minister has announce that Malaysian first point of contact to investor, Malaysian Industrial Development Authority (MIDA), an agency operate under Ministry of International Trade nad Industry (MITI) is announced to be corporatised and will be given more 'authority' to run the investment promotions activities. New name also has been suggested, Malaysian Investment Development Authority to stay with MIDA acronym.

With this exercise, MIDA will have more power to do promotion without to deal with lengthy bureaucracy processes. As corporate body, MIDA will have the capability move together with EDB of Singapore, BOI Thailand and others. The structure will be determine later and will be completed by end of year. With this announcement, MIDA will be more leaner and can deliver better performance.

What Malaysia Need?

We have been focusing on new and emerging technology on electronics Industry, but we forgot to look back at why those 'giant' gain rank in this industry. As such:

1. No Anchor.

I would like to take 2 example, Japan and Korea. Japan has many electrical appliances companies that produce variety of products. As we all know, electrical products is combination of technology from electronics, chemical and mechanical. Sharp start their business producing mechanical pencil, then move to electronics calculator. Later they started to produce TV and other electrical products. Since they own the products, they have the knowledge and capability to go through the market.

In Korea, Samsung. Why they can design high tech products is the same reason as above. They own the technology and they can control the market. In Malaysia, we do have electrical appliances manufacturer as such Pansonic, ECE and Khind. In fact, Pansonic is one of the top brand in India. That means we have the capability. Most of Malaysian brand company, they intend to produce existing products by 'copying' other giant. Less R&D effort to be made. No investment in Pilot Plant. As such, to sustain in the market is quit competitive. Maybe we can compete in 2nd tier market, but don't we have dreams to be known and stand beside Sony, Sharp, Samsung and others. If we have the man power, where should they contribute?

2. Human Capital

We have thousands of high quality engineers. But why our technology is still behind. Nowadays, those engineers were attracted to MNCs which can pay higher, and left the last qualifier to operate in local companies. Some others move to Singapore due to currency exchange. Universities should go through their 'inputs' and focus how train they graduate to be high achiever. Take MIT for example. Giants around the world acknowledge them. What about UTM, UKM, UM, UiTM, MMU, UIA, UniSEL and others? Government should encourage Universities and Higher Education Institutions to work together with these companies. We don't want high result graduate but unable to apply it in the market.

3. Focusing on New Investment only

To develop more technology, investment in high tech is a much. As such, not only we can focus on New investors to knock our door, why don't we ask those existing companies to move up the value chain. New incentives and promotion should be put to those who want to develop and invest in Research and Development. MiGHT, an agency under MOSTI has take thoce lead by promoting the Innovation award. Let see where it will lead in 5 years time.

2009 New Market - LED and Solar

For 2009, LED and Solar Module is predicted to get a higher demand. Both of the items can save energy, by using low power and by producing power with help of nature, have been popular since the awareness of environmental issues.

LED - Light Emitting Diode. It can be classed into several types. Currently, tycoons all around the worlds is racing to produce cheapest, brightest, safest and most efficient LED ever. In conjunction with the "Banning the Incandescent Light Bulbs" campaign around the world, LED is the best solution. Consumer can regain their cost just not more then 2 years by saving the energy only. Plus, the LED is known for long lasting. Usually, a LED can even last for up to 15 years.

Solar Modules. This technology is known for many years before but only have further developed around 5 years back. This technology is known for safe power generator/producer. In some country, power from solar panels are sold back to the government to help reduce the unhealthy power generation. Many 'Giants' has establish in this field and mostly from Europe. Sun is our unlimited source of power. Via using solar energy, ones can save more money while save the earth.

Malaysia Electronics Industry 2008

The effect of world recession has arrived to Malaysia. The most affected industry are E&E seen most of its player is from the centre of the crisis, USA.

Starting from early 2008, many company start having problem with supply and demand. Since the collapse of Lehman brothers, investors became more careful in what they invest in. Follow by the decrease of value for 3 automotive tycoon in August. In November, Citibank has declared 50% drop of its share in the market. More issues grow even the Presidential Election has over. Can Obama change the situation (as per his campaign)?

In Malaysia, the country was first shocked by the shut down of a toy company in Penang, Nikko Electronics. More then 900 workers is unemployed. The latest is, Western Digital in Sarawak has seizzed its operation and more then 1500 workers is out of work.

Many economist predict that the worst is still not here. 2009 was said to be the peak of the slowdown. What it has to do with us? Well, government got income from these MNCs. They were source of income for our nation. Without them, the unemployment rate will rise, and the national income will go down.

Malaysia Semiconductor Supply Chain

Moving into 2008, Malaysia had succeed to create many cluster toward emerging technologies. In Electronics industry sector, year 2007 has noted investment of more then RM13 billion, RM3 billion more then targeted earlier. This ids due to stability of the nation and constant consultation from various agencies.

One of Malaysia main cluster is Semiconductor. This cluster comprised of companies from USA, Japan, Korea, Europe and more. The supply chain that was dream before now a reality since the whole supporting industry is available locally. From ingots grower to packaging.

Well, even thought the current situation of low trade and investment in first half of 2008, the second half seem to promise more and better inflow.

Zambia - Create profit here

Zambia, near Zimbabwe.

There is nothing there. A new gold mine to share. Heard of 2012, well, Zambia may be a good place to be. Their authorities is now working hard to promote investment into Zambia. Good offer may be given to starters.....

Lets see what happen....