Selangor State Executive Councillor for Investment Ng Sze Han inspects an IC design park launched in August 2024 in Puchong, Malaysia. - ST PHOTO
PUCHONG/PENANG (The Straits Times/ANN): Fifteen years ago, Terengganu-born Dr Salleh Ahmad could not find a job in Malaysia that matched his qualifications. He had just graduated from France’s top engineering school ESIEE Paris with an engineering degree in microelectronics in 2009 and wanted to design microchips for the aerospace sector.
Instead, he stayed in Paris to work for Laboratoire de l’Accélérateur Linéaire, a research unit within the French national nuclear and particle physics institute. In 2012, he moved to microchip manufacturer Weeroc to pursue his career while studying for his PhD in Microengineering in Aerophysics at Paris-Sud University.
Now, Dr Salleh is returning to his homeland as Weeroc’s chief technology officer, tasked with setting up an office in Selangor’s Integrated Circuit (IC) Design Park. Located in Puchong, a suburb 20km south of Kuala Lumpur, this facility spearheads Malaysia’s ambition to move up the semiconductor value chain.
“Malaysia is a good choice due to its bright industry prospects, government incentives, and the low cost of doing business,” Dr Salleh told The Straits Times.
In 2022, Weeroc won a tender from the European Space Agency to lead a microchip project for the European telecommunication satellite platform in collaboration with Airbus Defence and Space. Dr Salleh said the team in Puchong will be gradually integrated into this project.
Dr Salleh is one of the returnees contributing to the manpower needed to drive Malaysia’s chip-sector ambitions.
Another 60,000 engineers are required for the chip industry, in addition to the existing pool of about 90,000, said Malaysia Semiconductor Industry Association (MSIA) chairman Wong Siew Hai.
The nation’s ambitions rest on a three-pronged plan to gain and train talent via the three Rs: recruit, retain and returnees. That is, to hire the necessary engineers; retain existing talent; and encourage Malaysian engineers working abroad to return home.
The talent pool is key to boosting Malaysia’s RM575.45 billion (S$174 billion) thriving chip sector, which contributes to 7 per cent of global exports. It aims to double this figure to RM1.2 trillion and 15 per cent of global exports by 2030.
The country already hosts big names like Intel and Infineon in its semiconductor hub of Penang. But it aims to climb up the global semiconductor supply chain – projected to be worth more than US$1 trillion (S$1.3 trillion) by 2030 – by transitioning from its traditional strengths in packaging and testing services to high-value fabless manufacturing and IC design.
Weeroc, for example, is set to invest RM20 million in its Selangor office by the first quarter of 2025. It plans to employ five French senior executives and 11 Malaysian engineers, eventually expanding to a 100-strong workforce in the next five years.
The Puchong integrated chip design hub that was formally opened last month – and touted as the largest in South-east Asia – needs up to 400 local engineers, with 60 already hired by anchor tenants and related partners, according to Selangor Investment executive councillor Ng Sze Han.
“Anchor tenant MaiStorage has established an office in the park. Five Malaysians who previously worked at Taiwan’s Hsinchu Technology Park have returned to lead and mentor local hires as qualified IC designers,” he told ST.
In addition to providing a suitable platform for returning talents to advance their careers, the Puchong chip design hub is offering fresh engineering graduates an attractive starting monthly salary of as much as RM6,000, Mr. Ng added.
This compares with the national median monthly salary of RM2,600 in the third quarter of 2023: with Selangor, Kuala Lumpur and Penang coming in at RM2,900, RM3,900 and RM2,645, respectively. The Department of Statistics Malaysia did not provide salary data for specific electric-and-electrical engineering occupations.
In Taiwan and France, engineering grads can command ringgit-equivalent monthly salaries of up to RM9,000 and RM17,000, respectively. But they must have a relevant Master’s degree, at the minimum.
When queried on the advantage of foreign countries such as Singapore to hire talent by offering higher pay, Selangor’s councillor Ng said: “We can’t treat Singapore as a competitor, rather to complement your supply chain. Our cost of doing business is lower than Singapore.
“Not every talent is fighting for top salary or is accustomed to fast-paced Singapore society. But they want better quality of life, so Puchong is the suitable place.”
Malaysia’s chip industry has benefitted from US-China rivalry as global giants move their operations, and manpower, to South-east Asia to diversify their supply chains.
By setting up shop in Selangor, MaiStorage, a RM100 million subsidiary of Taiwan-based chip design house Phison Electronics, could spark a larger exodus of workers to Malaysia, said Phison’s Malaysian co-founder Pua Khein Seng.
“There are more than 100 Taiwan-based Malaysian engineers who may want to return to home... At the end of 2023, I nearly decided to open a new office in Vietnam. However, it is not my hometown. I believe Malaysia is more convenient, even though its efficiency is lower than Taiwan in terms of output,” he told ST.
And should Malaysia’s IC design sector really take off, Mr Pua estimates MaiStorage will be looking for at least 500 engineers to meet its operational needs.
Penang Chief Minister Chow Kon Yeow is optimistic that the northern island state, known as the Silicon Valley of the East, will be able to attract and retain its talent pool.
“There are more than 30 IC design companies in Malaysia, 28 of which are proudly based in Penang. The fact is that the talent pool is already established here,” he told ST, adding that its capital Georgetown is launching a new initiative called “Penang Silicon Design @5km+” to attract, hire and upskill vital talent.
MSIA’s Mr Wong said that over the past five decades or so, the chip industry has developed a strong ecosystem in order to retain the requisite talent, with a combination of good compensation, sound job prospects and a work-life balance.
“Most of the talent is in Penang. Local big names such as Oppstar, SkyeChip and Infinecs, as well as global players like AMD and Intel, have employed more than 7,000 engineers,” he told ST.
Germany’s largest semiconductor manufacturer Infineon Technologies, which has a workforce of more than 500 on the island, claims the lowest employee attrition rate among the chip industry in Penang, thanks to better career prospects and continuous training.
“In the northern region of the electrical and electronic sector, the attrition rate is roughly 10 to 15 per cent. Our attrition rate is 5 per cent, which is considered very healthy,” Dr Raj Kumar, senior vice-president for technology and research and development at Infineon, told ST. - The Straits Times/ANN
