A case for the E&E sector in Malaysia. (Global Malaysian Network (GMN) Workshop 17th May 2014, San Jose, California)

1. A case for the E&E sector in Malaysia

2. 2
The Evolution of E&E in Malaysia
Simple components,
semiconductor parts assembly and
SKD electrical products
Consumer electronics
parts to full assembly
Office & computer
equipment (inc. hard
disk drive and hard
disks)
Higher value-added
products/activities
- R&D
- IC & System Design
- Wafer fab,
- Ingot growing
- Low volume, high complexity and high
mixed products (e.g: instrument, medical,
aerospace),
- Digital consumer goods (e.g blu-ray player,
HDTV-LED flatscreen, e-book)
2010
1990
1980
1970
Started in 1970’s with 7 companies
Consumer : Clarion and Bosch
Components : AMD, HP, Intel, Litronix and
National Semiconductor
Future
Fablite
Fabless
Miniaturization
Flexible electronics
Electric Vehicle (EV)
Laser Video Display
SMART Electronics
Internet of Things
• Labour Intensive
• Low Technology Products
• Low value added
• Capital Intensive
• Knowledge Based
• Hi-Tech
• High Value Added
Source: MIDA

3. 3
Since then and today
700
E&E Companies in
Penang
200MNCs
directly in E&E
50%Penang
workforce directly or
indirectly in E&E
E&E contributes
33%of Malaysia’s
export

4. 4
E&E is still very important
Source: MATRADE

5. 5
80% of Malaysians
earns < RM3k
a month
Despite all these…
Local companies
not moving up the
value-chain
Malaysia’s value
proposition for new/
existing investments
Lack of R&D
breakthrough
Gaps between
IP creation &
commercialization
R&D $ ≠ ROI University measurement
≠ commercialization
Depletion of
Science
graduates
Shortage of STEM
for Industry

6. 6
Challenges faced by E&E in D&D
The core challenges which we have to address to achieve High
Income nation status
Challenges MNCs Large Local Companies SMEs
Funding (Grant) OK
Limited (Mainly own
funding)
Difficult
Human Capital (Good Quality Fresh
Graduates - GPA 3.5 and above)
OK Difficult Difficult
Human Capital (Experienced) Difficult Difficult Difficult
Collaborations (Academia) Limited Limited Very Limited
Technology Acquisition N/A Limited Very Limited
Global Competition High High High
Competency of Vendors / Suppliers
/ Partners
Low Average N/A
Source: Special Innovation Unit, PM's Office

7. 7
What others are doing
Other Research and Collaboration
Institutes
Formation
(Year)
Research Areas of research
Annual
research
budget (USD
million)
R&D
Professionals
Funding
Fraunhofer, Germany 1949 Yes
ICT, Health and Nutrition,
Safety and Security,
Transportation and Mobility,
Energy and Living,
Environmentally Friendly
production
2180
# 22093
employees
with majority
in research
70% public
financed, 30%
government
Industri Technology Research Institute
(ITRI) Taiwan
1973 Yes
ICT, Electronics,
Optoelectronics, Material and
Nanotechnology, Green Energy
and Environmental
Technology, Medical Devices,
Mechanical and Systems
Technologies
621 (Year
2012)
# 5756
About 50%
from
government,
the other 50%
from contracts
VTT, Finland 1942 Yes
Biotechnology, Electronics,
Energy, ICT,
Microtechnologies
430 # 3000 na
Electronics and Telecommunications
Research Institute (ETRI), Korea
Republic
1976 Yes
ICT, Components and
Materials Research,
Broadcasting and
Telecommunications
515 (Year
2011)
# 1737 na
IMEC, Belgium 1984 Yes Nanoelectronics 437 # 2051
78% from
contract
research, 21%
from grants
A*Star, Singapore 1991 Yes
Biomedical Science, Physical
Sciences and Engineering
NA NA
Callaghan Innovation (formerly Crown)
2013
(restructured)
Yes
IT, Environmental technology,
Biotechnology
330 NA na

8. 8
Where are we for the local companies?
Most of the
locally owned
companies
were
incorporated
during the 80s
and 90s –
hence what
happened to
Malaysia’s E&E
in the 21st
century?
(In RM Millions)
Market Cap
(as at 16 Oct
2013)
Formation
(Year)
State
JCY International 1,278.40 1994 Johor
Globetronics Technology Bhd 864.92 1991 Penang
Unisem M Berhad 600.06 1989 Perak
Uchi Technologies Bhd* 534.69 1981 Penang
Malaysian Pacific Industries Bhd 566.86 1962 Perak
Inari Amertron Bhd 560.08 2006 Penang
Iris Corp Bhd 386.22 1994 KL
PIE Industrial Bhd* 306.88 1997 Penang
GUH Holdings Bhd 273.16 1961 Penang
V.S Industry Berhad 250.06 1979 Johor
Notion VTEC 205.36 1995 Selangor
Vitrox Corp 189.21 2000 Penang
Note:
* Foreign Controlled

9. About CREST

10. 10
With that, 10 Industry Founding Members
UNIQUENESS: INDUSTRY LED

11. 11
And: Supporting Government Org. and Inst.

12. 12
Board of Directors
Deputy Chairman
Dato’ Redza Rafiq
Chief Executive Officer
Northern Corridor
Implementation
Authority (NCIA)
Director
Professor Dato’ Dr. Omar
bin Osman
Vice Chancellor
University Sains Malaysia
Director
Mr. Ooi Boon Chai
Chairman
Penang Skills
Development
Centre (PSDC)
Director
En. Mohd Khairul
Adib Abd. Rahman
MOSTI
Director
Dato’ Dr Mohd Sofi Osman
Altera
Director
Chris Kelly
INTEL
Director
Dr Hari Narayanan
Motorola Solutions
Director
En. Farid Wajidi
Northern Corridor
Implementation
Authority (NCIA)
Chairman
Dato’ Azman Mahmud
Chief Executive Officer
Malaysia Investment
Development Authority
(MIDA)
Director
En. Mohd Khairul
Adib Abd. Rahman
MOSTI
Director
Dr. Kamarulzaman
Mohamed Zin
Silterra
Director
Chris Kelly
INTEL

13. 13
GOVERNMENT
INDUSTRY ACADEMIA
•Advanced & well
equipped shared
services
•Product & process
improvement
•Downstream &
outsourcing
opportunities
•Human capital
•R&D ecosystem
•Local & Foreign linkages
•Industry driven programs
•Increased IPs and patents
•Industry exposure for
postgrads
•Access to best
manufacturing practices
•Commercialization of
R&D
•Sabbaticals &
internships
•SME Development
•No duplication of resources
•Comprehensive monitoring &
channelized efforts
•Greater multiplier effect
•Optimization of funds
Partnership Model

14. 14
What is in the offing?
Network of shared services
Involvement of local companies
Cross-company sharing
arrangements
Outsourcing opportunities in
the realm of design and
development
Wider collaboration between
academia/industry
Network covering LED testing and design centre,
failure analysis labs, embedded system labs, RF labs,
IC design centres
39.5% of research projects involving local firms (by
value)
Microprocessors   Embedded systems
LED  Material sciences
Hardware  Software Integration
Increasing opportunities from MNCs for outsourced
design and development activities
Involving also top universities from abroad:
• University of Cambridge
• UC Santa Barbara

15. 15
CREST
C
C
C
C
C C
C
M
SA
S
A A
S
A M
S
A
M
A
M A
M
S
S A
S
M
A
A
A
A
S
S
A
S
M
A
C
S
CREST
CC
C
A
M
M
A
S
A
C
C
S
S
M
A
A
M
CREST
CC
C
S
M
A
M
A
M
Phase 1 (Seeding)
2012 - 2014
Phase 2 (Cluster Focus)
2015 - 2017
Phase 3 (Take off)
2018 - 2020
• Creating collaboration
research platforms (for
Industry and Academia)
• Growing talent & Pool of
Experts
• Developing
specialization & Drive
Innovation
• Developing a network of
technology clusters
• Generating international
partnerships &
collaborations
• Establish a solid
ecosystem
• Enabling development
of technopreneurs
CREST Strategy – Envisioning 2020

16. 16
Roadmap: Today (Seeding)
Collaboration
14 academic institutions
13 Locals and 1 International
28 Companies
18 Locals and 10 MNCs
82 Post-graduates
16 in 2014, 39 in 2015, 27 in 2016
36 commercializable IPs
1 in 2014, 19 in 2015, 16 in 2016
195 Publications
11 in 2014, 81 in 2015, 92 in 2016
Projected Outcomes
RM36 million, 51 projects
65% industry and 35% Government

17. 17
As a start: 28 companies, 14 academia, 51
projects | Collaborate

18. 18
Roadmap: Cluster Focus
R&D
Phase 1: Seeding
2012 – 2014
Phase 2: Cluster Focus
2015 - 2017
Phase 3: Take Off
2018 - 2020
51 R&D Grants
involving 28
companies, 14
academic
institutes
Optoelectronics (LED Epitaxy, LED apps)
Continuous R&D Grant programs
Embedded (Wearable)
Embedded (Internet of Things)
EEV technologies
Printed electronics

19. 19
Where are the OPPORTUNITIES?
R&D
Phase 1: Seeding
2012 – 2014
Phase 2: Cluster Focus
2015 - 2017
Phase 3: Take Off
2018 - 2020
51 R&D Grants
involving 28
companies, 14
academic institutes
Optoelectronics (LED Epitaxy, LED apps)
Continuous R&D Grant programs
Embedded (Wearable, IoT)
Embedded Solutions, Ubiquitous Computing, Augmented Reality
Healthcare, Mfg., Lighting, Transport….
Wearable, Large Area / Organic Electronic, CNT/Graphene
Wireless/BB/LTE Communication
Sensors – Physical, Chemical, Bio, Optical
Big Data, Network Security, Cloud Services
Advanced Energy harvesting/storage/transmission
UI/UX specific/defined SoC/IC/FPGA
The New
New Thing

20. 20
RM100m
R&D Grant
Research & Development
2 Cycles
Per year

21. 21
2012
2013
Approved
53 applications
Worth RM 35.8m
(INDUSTRY RM 23.2m [65%]
CREST RM 12.6m [35%])
R & D (Collaborative)
Evaluated
127 applications
Worth RM 98m
100m R&D Grant for 10 years

22. 22
Nurturing Industry-Ready Graduates
Industry-Relevant Curriculum & Finishing School
4 Years B.Sc. in Engineering
+
Existing
Talent
New
Talent
Year 1-2
Industry Awareness
Year 3-4 + max. 6 months
Finishing School
FasTrack, SNUCOE
HIT-RSE, TESSDE
GEMS
High $
Limited talent
• Early Career Awareness
• Industry Workshop
• Innovation Challenges and
Entrepreneurship Program
• www.thegreatlab.com
• Industry-Driven Curriculum, Blended Learning (MOOC)
• Extended Internship (6-18 months), Accel. Industrial MSc/PhD
• Industry-based projects- Project Hopper
• Adjunct Lecture & Lecturer Attachment
• Talent Database Mapped to Industry Requirements
Low $
Higher talent
• Limited internship period, 10-12 weeks
• Limited industry involvement – IAP, FYP, Innovate Malaysia
• Year 4 career talks & fairs
Industrial
MSc/PhD
1 Year Up-
skilling
Immediate Intervention, 2011-2014
Sustainable Industry-Relevant Graduate Program, 2013-2020

23. 23
Cluster Development
R&D Ecosystem: Major Clusters

24. 24
Match-making
Commercialization

25. 25
From researchers to MNCs
Researchers
Grant recipients
Academicians
Industry researchers
Start-ups
Post Grant
Recipients
Co within the
ecosystems
Researchers
interested to be
entrepreneurs
SMEs
E&E and supporting
Co. in the region
Co. through our
engagement within
the ecosystem
MNCs
From start-up funds to operational funding
CREST Level of Engagements
Bridging the GAP

26. 26