Secretary Deck Go is right. Malaysia and Vietnam are enjoying a technology boom as billions of dollars in FDI poured in the wake of a rush to protect high tech products from the threatened Trump tariffs starting next year
Someone in one of my Viber Groups posted an article from Malaysia’s thestar.com and I am green with envy and almost want to cry.
Why did our officials fail us so terribly? While our politicians were so engrossed in enriching themselves with their share of pork barrel budgets and unaudited confidential funds, tech hubs were being built in Malaysia and Vietnam.
“An accelerating influx of tech investment is transforming local economies in Malaysia and Vietnam,” Malaysia’s The Star reports.
“Multinationals, governments and startups rush to develop AI, establish chipmaking hubs and carve out access to raw computing power…seeding the tech nerve centers of the future in Southeast Asia. More than $100 billion in foreign direct investment has coursed through Malaysia and Vietnam from 2020 through 2023, with tens of billions more to come. The growth is resulting in job gains and rising incomes.”
See what I mean about wanting to cry! Malaysia and Vietnam were hard at work attracting tech investments while Duterte was concentrating on welcoming the POGO type investments that were also international scam hubs victimizing people worldwide.
The Star reports that the investments started flowing to Malaysia and Singapore during the COVID-19 pandemic and “is changing the way the world’s smartphones, computers and data center servers are made.
“Malaysia sees this as a once-in-a-lifetime opportunity of escaping the middle-income trap and soon achieving its aspirations as a high-income nation,” Chow Kon Yeow, the chief minister of Malaysia’s Penang state, told Bloomberg.
In Vietnam, about an hour’s drive from Hanoi, the province of Bac Ninh grew more than 37,000 new jobs in the four years through 2023, and is fast evolving into a high-tech industrial hub. The Star reports that Foxconn and GoerTek Inc., key suppliers to Apple Inc., Microsoft Corp. and Sony Group Corp. are among companies that have poured more than US$20bil into Bac Ninh in the last decade, making critical products that range from AirPods to printed circuit boards.
“GoerTek is building out its 127-acre (51-hectare) complex that will employ 50,000 workers. Advertisements abound on local websites, seeking a spectrum of candidates from low-skilled part-time work to senior engineering management positions. Businesses in Bac Ninh sought candidates for 15,500 jobs through the local employment service platform in the first quarter of this year, up more than 50 percent from a year ago.
“A new workforce with new skills is needed in order to meet the requirements of those firms,” Nguyen Duc Cao, deputy head of Bac Ninh Industrial Zones’ management board told The Star.
“Vietnam aims to have 50,000 chip engineers by 2030 and is encouraging people to enroll in upskilling programs. Provinces are providing incentives, such as better access to social housing and medical services, to instructors and students in training programs.”
Vietnam is also rushing to stabilize power supplies a year after outages caused losses of hundreds of millions of dollars to multinational manufacturers. Coal plants remain a large part of the solution.
Malaysia has been attracting major tech firms since the 70s including Intel and Lam Research. A free-trade zone in Penang, provided tax incentives, and offered an affordable English-speaking labor force.
Previously home to low-value processes for less advanced chips, Malaysia is now hosting manufacturers for more advanced chips used in smartphones and AI servers. Malaysia accounts for 13 percent of the world’s share of chip testing, packaging and assembly. It is now expanding its chip manufacturing capacity.
Inbound foreign investment in Penang’s electronics manufacturing hub has accelerated since 2019, nearly tripling from the decade before at $44 billion. Intel is close to completing its first overseas facility for advanced 3D chip packaging as part of its $7 billion expansion plan. Lam Research’s 800,000-square-foot campus is set to become its largest in terms of capacity and processing capability.
“The most obvious place to see this difference is in Batu Kawan,” Lee Lian Loo, the chief executive of Penang’s investment agency told The Star. The adjacent mainland, formerly home to lush rubber plantations, is now home to American data storage companies Western Digital and Micron Technology. Its maiden industrial park is expanding.
The Star also reports that the neighboring and largely agricultural state of Kedah, less than an hour’s drive from Penang Island, is also an emerging home to factories. Infineon Technologies in August opened a €7 billion ($7.8 billion) plant to churn out silicon carbide power-management chipsets there.
One advantage is Malaysia has ample power, and one of the cheapest in Southeast Asia.
Malaysia has pledged to train 60,000 engineers to fill the hundreds of thousands of new jobs that will emerge in the coming years. In northern Vietnam, many of the high-skilled workers are Chinese.
Malaysia’s southernmost state Johor is quietly powering some of the world’s most sophisticated artificial intelligence models. Palm trees have given way to boxy concrete buildings, humming with tens of thousands of Nvidia GPUs (Graphic Processing Units). A GPU is an electronic circuit that can perform mathematical calculations at high speed. Computing tasks like graphics rendering, machine learning, and video editing require the application of similar mathematical operations on a large dataset.
“We are building the backbone of a technology boom,” Lee Ting Han, an executive council member in charge of investments in Johor, told The Star. Nvidia is partnering with a local conglomerate to create a $4.3 billion artificial intelligence cloud and supercomputer facility. Microsoft is investing $2.2 billion in cloud computing and AI services.
A special economic zone under development with Singapore, which would be nearly twice the size of China’s Shenzhen, is expected to create 100,000 new jobs.
As for us, our exports of semiconductors declined last August by 22.1 percent from $99.2 million last year to $77.4 million. Kulelat.
Boo Chanco’s email address is [email protected]. Follow him on X @boochanco.
Be the first to comment