Semiconductor is the New Oil

I have mentioned this on a few occasions, that semiconductor is the new oil. It is becoming increasingly essential and strategic following global technological, industrial and economic growth.

There are two major reasons why the world now needs more chips. First, the revolution of the automotive industry. On top of producing internal combustion engine (ICE) cars that already need a larger number of chips than those a decade ago, we have also arrived at the electrification revolution of the automotive industry.

The electric vehicle (EV) boom in the past few years has exponentially driven the utilisation of chips. According to the International Energy Agency, 18% of cars sold in 2023 were EVs. It was 14% the year before, 9% in 2021, and 5% in 2020. This figure is expected to grow further.

Second, modern artificial intelligence (AI) techniques rely on computation on a scale unimaginable even a few years ago. The increasing need for leading-edge, specialised “AI chips” will not only grow the semiconductor industry in terms of volume but also in terms of sophistication.

Malaysia contributes to 7% of global semiconductor trade and is one of the top 10 semiconductor trade exporters in the world.

I was in Perlis and found out that UniMAP has a large faculty training more than 6,000 semiconductor talents currently. Penang, Kulim, Perlis and northern Perak will benefit from the new wave of high-end semiconductor investments.

The Government of Malaysia would like to see the northern region growing rapidly and growing together, in line with the mission outlined in the New Industrial Master Plan 2030, specifically on economic inclusivity. A strong semiconductor-driven growth in Penang, Kulim, Perlis, and northern Perak will help bring forth a national second takeoff.

When we speak of growth, this second economic takeoff must also generate quality employment opportunities with good pay for Malaysians. Growth is essential for improving the lives of Malaysians and building a strong middle class society.

This is my speech delivered at the AT&S Plant Opening Ceremony in Kulim Hi-Tech Park.

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