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E! Selamat Hari

Malaysia

T h e S e mi c o n d u c t o r I n d u s t r y :Mo v i n g U p t h e V a l u e C h a i n

I N T H I S I S S U E

F u e l i n g O i l a n d G a s I n d u s t r yG r o wt h T h r o u g h D i g i t a l i s a t i o n

Ma l a y s i a C o n t i n u e s t o A t t r a c tB u s i n e s s I n t e r e s t

S I R I M: Ma l a y s i a ’ s B e s t P a r t n e rf o r I n n o v a t i o n

A L a n d ma r k F a c t o r y U n l i k e A n y :  H o t a y i E l e c t r o n i c

MIDAE-NEWSLETTERMIDAE-NEWSLETTER August 2019 | 1

Highlights  

Foreign Investments in theManufacturing, Services

and Primary SectorsIncrease by 97.2% between

January – June 2019

MalaysiaContinues toAttractBusinessInterest

alaysia continues to sustain its investmentgrowth momentum in the firsthalf of 2019 (1H2019) despitethe challenging global economiclandscape and intensecompetition, with totalinvestments of RM92.0 billionrecorded in the services,manufacturing and primarysectors. These investmentswere from 2,554 projects and will potentially create 59,542 employmentopportunities in the country. During this period, foreigninvestments in these sectorsincreased by 97.2% to RM49.5billion from RM25.1 billionrecorded in the first half of 2018. This illustrates Malaysia'scompetitive and comparativeadvantages in attractinginvestments amid mountingglobal market uncertaintiesand trade war tensions.Domestic investments approvedin 1H2019 amounted to RM42.5billion, contributing 46.2% to the total investments.

M

MIDAE-NEWSLETTERAugust 2019 | 2

The services sector accountedfor the largest share of thetotal with approved investmentsof RM55.0 billion or 59.8%. A notable services project approved in 1H2019 is the large scale solar (LSS) expansionproject to be undertaken by TNB Bukit Selambau Solar inBukit Selambau, Kedah. TheLSS project with a capacity of30 MWAC will provide renewableenergy (RE) totalling 1,700MWby the year 2025. This is in line with theGovernment’s target of achieving20 per cent of the country’selectricity to be generated fromrenewable sources by 2030. The favourable investmentgrowth for the 1H2019 was driven by the robust performanceof the manufacturing sectorthat soared by 74.2% to RM33.1billion compared to RM19.0billion in 1H2018. The approvedmanufacturing projects willcreate 30,449 job opportunities,the largest potential employerin the economy.

The potential jobs createdinclude 1,829 electrical andelectronics engineers, 896mechanical engineers and 211chemical engineers. In addition,the projects will also require

about 2,886 skilled craftsmensuch as plant maintenancesupervisors, tools and diemakers, machinists, IT personnel,quality controllers, electriciansand welders.

MIDAE-NEWSLETTER August 2019 | 3

technological capabilities,develop the local supply chainand increase the country’s exportrevenue, the Government iscontinually investing in humancapital, technology andinfrastructure and focusing onsharpening the country'scompetitive edge.

Majority of the investments inthe manufacturing sector werefrom foreign sources, accounting75.8% or RM25.1 billion, and theremaining 24.2% or RM8.0 billionwere from domestic investments.The top foreign sources werefrom the United States ofAmerica (USA) with investmentsof RM11.7 billion, followed byChina (RM4.8 billion), Singapore(RM3.1 billion), Japan (RM2.1billion) and the British VirginIslands (RM1.4 billion). These fivecountries jointly accounted for92.0% of total foreigninvestments approved in themanufacturing sector for thisperiod. The expansion project of LongiTechnology (Kuching) from Chinais among the notable hightechnology projects approvedduring the period January to June2019. The company is expandingits capacity to producemonocrystalline solar cell tomeet demand in overseasmarkets. Other approvedprojects include a new projectfrom Advance Energy Industriesand expansion projects by On Semiconductors and PlexusManufacturing. These threecompanies are from the USA. Malaysia has consistentlypursued more capital intensiveprojects moving away fromlabour-intensive projects to high-skilled and technologicallyadvanced projects that supportthe sustainable developmentagenda of the nation. The capitalintensity, measured by capitalinvestment per employee (CIPE)ratio of projects approved withinthe sector increased to RM1,088,715 in January to June2019 from RM837,862 in thesame period last year.

By value of investments, PulauPinang (RM9.2 billion), Kedah(RM7.7 billion), Selangor (RM6.0billion), Johor (RM4.0 billion) andPerak (RM1.7 billion) accountedfor 86.4% of the total approvedinvestments in the manufacturingsector. Meanwhile, the primary sectorcontributed RM3.9 billion or4.2% to the total approvedinvestments in the first half of2019. The mining subsectorcontinued to lead with approvedinvestments of RM3.6 billion,followed by plantation andcommodities with RM257.3million and agriculture withRM48.6 million. Theseinvestments are expected tocreate 443 job opportunities. Malaysia’s 1H2019 investmentperformance is a testament ofthe Government’s commitmentto remain pro-business withprudent and pragmatic policiesto ensure a conduciveenvironment for businesses tothrive. Coupled with strategicpromotions to welcome qualityinvestments that will contributeto enhancing the country’s

Malaysia’s 1H2019investment

performance is thetestament of the

Government’scommitment

to remain pro-businesswith prudent and

pragmatic policies toensure a conducive

environment forbusinesses to thrive.

MIDAE-NEWSLETTER

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The SemiconductorIndustry: Moving Up theValue Chain

 August 2019 | 4

Industry

he semiconductor industry is the primaryenabling technology in everyproduction line in the world.Semiconductor devices areessential components ofelectronic circuits and aremade primarily from silicon.They can be found in almostevery electrical device suchas smartphones, computersand even coffee machines.Companies that operate inthe semiconductor industrygenerally belong to one ofthese groups:

Pure Play Foundries:These are companies thatdo not have any designcapabilities as they focusonly on the fabrication andtesting of semiconductorproducts. Integrated DeviceManufacturers (IDMs):IDMs are companies thatdesign, fabricate and sellsemiconductor products. Fabless: Fablesscompanies are involvedonly in the design and saleof semiconductor productswhile outsourcing thefabrication to foundries.

Understanding theSemiconductor Industry

Trends within theSemiconductor Industry

with the top nine companiesmaking up approximately59% of worldwidesemiconductor salesrevenue. Wirelesscommunication is the largestend-use segment forsemiconductor products.Growth in this segment isexpected to continue on theback of increasingsmartphone penetrationrates and infrastructurespending in preparation for5G networks. Steady increases in IoThardware spending will be asignificant source of revenuefor the semiconductorindustry in the future.Notable trends in thesemiconductor industryinclude:

1. 2. 3.

The investment outlook inthe semiconductor industryis potentially attractive givenits value propositions.Estimates published byGartner and Statista predictssemiconductor sales revenueto grow at a CAGR of 6.17%and hit USD503 billion in2020. The semiconductor industryis relatively consolidated,

Industry forces and digitalinnovations are reshaping thesemiconductor industry.Together, these companiesdesign, manufacture and sellproducts such as memorychips, microprocessors,integrated circuits andcomplex systems-on-a-chip(SOC). R&D spending is a crucialmetric for semiconductorcompanies as improvementsin manufacturing processescan help to drive downproduction costs, which leadsto higher margins forsemiconductor companies.With R&D spending expectedto increase, profit marginsare expected to expand overthe next few years.

MIDAE-NEWSLETTER August 2019 | 5

Artificial Intelligent (AI) The growing demand for AI-based applications fromother industries such asmedical devices and imagingtechnology, life sciences andbiotechnology, clean andgreen technology,information andcommunication technologyas well as other fields willcreate new growthopportunities forsemiconductormanufacturers. Transition to MoreAdvanced Technology Node The transition to smaller andmore current nodes in IC

Autonomous or ElectricVehicles (EVs)Semiconductors will play avital role in the growth andinnovation of autonomousdriving technology in theautomotive industry wheresemiconductor componentswill be widely used forautonomous cars and electricvehicles. The rapidlyexpanding automotivemarket will provide ampleopportunities for automotivesemiconductors to improvethe connectivity, batteryperformance in EVs,enhanced sensors, and othertechnologies.     Wireless CommunicationProducts and Growth of 5G Wireless communication iscurrently one of the mostsignificant end-use segmentsfor semiconductor products.Growth in this area is heavilydriven by trends such asincreasing smartphonepenetration rates and thedemand for faster connectionspeeds. Similarly, theintroduction of 5Gtechnology, which promisesto provide data transmissionspeeds over wirelessbroadband networks of up to20Gbps, 20 times faster than4G networks,

will also benefit thesemiconductor industry.It is estimated that by 2025,5G infrastructure spendingwill hit USD326 billion. Of which, nearly 80% willbe spent on networkinfrastructure, which isessential for 5G networksto operate smoothly. 5Gcompliant modems,wireless devices, small cellsand data centres are a fewexamples of the hardwarerequired by 5G networks,which will includesemiconductors as anessential component. These investments will have a positive impact on the entire semiconductorindustry. Rise in Hardware Spendingfor IoT ApplicationsSemiconductors are thebedrock of technology. These days, it is nearlyimpossible to find a devicethat doesn’t rely onsemiconductors.Autonomous vehicles, one of the up and comingIoT application, saw a 58%jump in semiconductorrevenues from 2016 to 2017.As the IoT continues tomaterialise, otherapplications such as cloud-based computing andartificial intelligence (AI) will also see an increase inhardware spending, thusleading to an additionaldemand for semiconductors.Gartner estimates that therewill be 20.4 billion smartdevices in 2020. Hardwareequipment such as smartdevices is estimated toaccount for 35% of the totalIoT market in 2020.

i. ii.

iii. iv.

v.

Currently, wirelesscommunication isone of the mostsignificant end-usesegments forsemiconductorproducts. Growth in this areais heavily driven bytrends such asincreasingsmartphonepenetration ratesand the demand forfaster connectionspeeds.

manufacturing will ensurethat companies producingICs have a competitiveadvantage by offeringcomponents that haveincreased power andperformance. However, thismove presents a challengein terms of cost andresources that thesemiconductor industryneeds to address.

Challenges Ahead

MIDAE-NEWSLETTER August 2019 | 6

Challenges are inevitable in anyindustry but recognising themis the crucial steppingstone to enable industrystakeholders to effectively map out strategies toovercome them. The semiconductor industryis challenged with concernsdriven by innovation andtechnological developmentsmoving at a drastic pace. The industry needs tocontinuously inject newinnovations in enhancing thevalue chain of the industry.It is crucial for the localsemiconductor industry todevelop a pool of productdesign talents and addressissues such as intellectualproperty protection, licensingand research and development(R&D) spending. Not forgetting, the ability forMalaysia to adapt and adoptnew technology efficiently willpose as challenge whilstdetermining Malaysia’scompetitiveness in the globalvalue chain. As the globaltechnological trends led by topsemiconductor and technologynations will affect and shapethe local industries, Malaysiacan no longer be playingcatch-up but must activelystrive to build its expertiseand niche.

Recognising the importanceof innovation and designactivities to further spur the growth of the industryin Malaysia for coexistencewith global technologytransformation trends, MIDA continues to encouragecompanies to undertakedesign and development (D&D) activities in the E&Eindustry. These activities are eligible for incentives of 70% - 100% Pioneer Statusfor 5 to 10 years subject to

Gearing up the Future

Integrated circuit (IC) design; IC packaging design;    Embedded system design;     Test and engineering designservices for E&E clusters andits connecting supply chainecosystem.

a)b)c)d)

Any queries and applicationsfor the above activities can besubmitted to E&E IndustryDivision of MIDA:(https://bit.ly/2Z7ZdUY).

specified criteria or conditions.Other eligible activities for theincentives include D&D andservices of:

MIDAE-NEWSLETTER

FuelingOil and GasIndustry GrowthThroughDigitalisation

 August 2019 | 7

ctive use of technology to capturenew frontiers and driveproductivity is not new to theoil and gas industry. Theupstream sub-sector forexample, has been at theforefront of severalsignificant technologicaladvances in the past, fromsupercomputing techniquesfor reservoir modeling toseismic and 3D imaging fordrilling and projectdevelopments; whilerefineries have beenpursuing digitalisation formore than 30 years, withtechnologies like advancedprocess control (APC) beingpart of the operational mixof many operators. What is different today ishow fast technologytransformation isaccelerating. Today’s globaloil and gas industry isoperating in a uniqueenvironment of a highdegree of volatility and risk.Diminishing returns, coupledwith forecasts for continuedvolatile prices haveheightened the urgent needfor business transformation.

A This has pushed operatorsacross the oil and gasindustry to adopt digitaltechnologies, not only toensure efficient operationsand sustainability but also toaddress safety andenvironment requirements. The World Economic Forum,recognising digitaltransformation as anemerging driver of sweepingchange in the world,launched the DigitalTransformation of Industries(DTI) project in 2015 tobetter understand andprepare for newopportunities and themesarising from latestdevelopments and trendsfrom the digitalisation ofbusiness and society. The DTIanalysis of the oil and gasindustry in 2016 focused onfour issues central to theindustry over the nextdecade: digital asset lifecycle management, circularcollaborative ecosystem,beyond the barrel andenergising new energies. As such, developments intechnologies such as cloud

computing, the Internet ofThings (IoT), mobility,artificial intelligence (AI),virtual reality (VR) as well asbig data analytics have beensignificant contributorsdriving digitalisation trendsin the industry. The DTIanalysis further expoundedthat combining technologiesin innovative ways couldmagnify their capabilitiesexponentially, far beyondtheir effectiveness ifdeployed separately. This isalso echoed by McKinsey’sCommentary on “The NextFrontier for DigitalTechnologies in Oil and Gas(August 2016)”, whichestimates that the capitalexpenditure in the oil andgas industry can be reducedby up to 20% with effectiveuse of digital technologies.It also forecasts that totalcash flows will improve byUSD11 per barrel across theoffshore oil and gas valuechain, adding USD300 billiona year by 2025.

Services

MIDAE-NEWSLETTERAugust 2019 | 8

Looking at Malaysia’s very ownhome-grown oil and gasindustry players, PETRONAShas embarked on driving thedigital transformation of theoil and gas industry within thecountry. This includes themdigitally transforming theirprocurement function to aflexible, cloud-native and openplatform. With thistransformation, PETRONAS isable to better predict demandfor categories of spend,enabling them to providemore accurate signals to theirvendors and suppliers byleveraging AI, big data,blockchain, and IoT to achievetransformative businessoutcomes. This has resulted ina win-win gain for PETRONAS,their vendors and their clientsalike. Case in point: Sky Futures (M)Sdn. Bhd., a Malaysian ownedcompany that provides end-to-end drone-based industrialinspection services usinground-breaking software,sensor and technologysolutions. The company’sinspection services are 85%more cost-effective thanconventional inspectiontechniques. This is attributedby reduced shutdowns and thefaster, safer and accuratehigh-quality data sets obtained by Sky Futures’ inspectiondrones for their clients to

make a smarter decision inregards to their operations. Moving forward, digitaltransformation willundoubtedly continue to be afocus across the oil and gasindustry. The government,through various agencies,including MIDA, will continueto support the adoption ofdigital transformationundertakings within theindustry by providing thenecessary assistance andfacilitation for industry playersto thrive.

Some notable incentives andgrants offered by MIDA includegrants for research and designtraining, modernisation andupgrading of equipment andacquiring new technologies, aswell as incentives andfacilitation relating to theadoption of automation orIndustry 4.0 technologies. MIDA trusts that adoption ofdigitalisation within theindustry will further enablecompetitive and economicadvantages to the domesticoil and gas industry players.

Source: White Paper: Digital Transformation Initiative Oil and Gas Industry,World Economic Forum, January 2017

MIDA trusts that adoptionof digitalisation within theindustry will further enablecompetitive and economicadvantages to the domesticoil and gas industryplayers.

MIDAE-NEWSLETTER August 2019 | 9

Why Malaysia Series

A LandmarkFactoryUnlike Any: HotayiElectronic

Hotayi Electronic is a leading GlobalElectronics Manufacturing Services (EMS)company that provides a wide range of value-added manufacturing solutions and servicessuch as PCB assembly till box build. Foundedin 1992, this Taiwanese-owned company hasachieved remarkable international milestonesunder the leadership of its chairman, Dato'Lee Hung Lung. For the past 27 years, Hotayihas been continuously striving for operationalexcellence and continuous improvement. Thishas become part of Hotayi's culture, whichenables the company to continue to gain trustin customer partnership over the years. In 2018, after just 10 months of construction,the state-of-art 350,000 sqft Hotayi BatuKawan facility was completed in time to caterto the customer’s global strategic plans toincrease capacity in South East Asia. Theavailability of highly-skilled, multi-lingual

Hotayi Reinvests in Malaysia

labour force and the efficiency of theelectronics supply chain made Penang theSilicon Valley of South East Asia. In addition,Malaysia, being a politically stable countrywith the government adopting policies toensure an efficient, responsible and pro-business environment was undoubtedly thefirst choice to establish Hotayi’s new state-of-the-art facility. Hotayi has invested heavily inthis new facility which include three majorelements namely Smart, Green and Nature.Talents from all over the world were calledtogether to accomplish this landmark factory. Technologies like car plate recognition, facialrecognition, building management systems,and more than 500 sensors were installed andimplemented into this smart factory. Thesetechnologies improve the quality of theworking environment and take the employeesto a new level of work-life.

Dato' Lee Hung Lung,Chairman,

Hotayi Electronic (M) Sdn. Bhd

MIDAE-NEWSLETTER August 2019 | 10

Hotayi recognises that talent is at the heart of the company. Over the years, Hotayi hasbeen able to meet all customers’ demands and requirements and attributes thesesuccesses to the strong teamwork within theemployees. Hotayi strives to create a platformwhere talents from all areas can gather, work together, learn together, grow together,and accomplish the impossible as a team. As an IATF16949, ISO 9001 and ISO 14001certified company, Hotayi’s customer-baseconsists of reputable multinational originalequipment manufacturer companies thatcover diversified markets with productsranging from automotive, consumer, storagedevices, commercial, public safety andindustrial equipment. “To be able to supportworld-class customers, Hotayi needs to be aworld-class company as well. To be a world-class company, Hotayi needs to have world-class employees,” explains Dato' Lee, Chairman of Hotayi. Hence, Hotayi has been working closely withhigher learning institutions to prepare and

Talent is at the Heart of Hotayi equip students with the necessary tools andskills in the industrial sector. The latestcollaboration being an MoU signed with Tunku Abdul Rahman University College (TAR UC). This MoU paves the way for TAR UC andHotayi to collaborate on actual industrialmatters amongst others internship andopportunities as well as scholarships forstudents in the fields of engineering,microelectronics, ICT and applied science. Over the years, accumulated technicalexpertise and experiences in manufacturingcore strengths have helped to establish Hotayi as a leading-edge solutionmanufacturing provider that is able to meetand exceed customer needs in term of quality,cost and delivery requirements. Hotayi usesits core competency in information technologyto integrate innovative automation solutionsinto its manufacturing processes and businessworkflow to provide superior quality control,high process efficiency, optimised capacityplanning, end-to-end product traceability and timely delivery.

Malaysian Standards

SIRIM:Malaysia’sBest Partnerfor Innovation

MIDAE-NEWSLETTER August 2019 | 11

SIRIM Berhad (SIRIM), formerly known as theStandard and Industrial Research Institute ofMalaysia, wholly-owned by the Minister ofFinance Incorporated is a premier researchand technology organisation in Malaysia. Asan organisation that came into operation on1 September 1996 through a corporatisationscheme of standards and industrial researchinstitute, SIRIM ensures timely and focusedresearch and innovative technologies thatbring about improvements to enhance thecompetitiveness of the local industry. It isnow entrusted as an agency under theMinistry of International Trade and Industry(MITI) since 22 October 2018. Being the national champion of quality, SIRIMis nation’s machinery for research andtechnology development and plays a majorrole in the development of the private sectorin Malaysia. Tapping into SIRIM’s expertiseand knowledge of over forty years, it focusseson developing new technologies andimprovements in the manufacturing,technology and services sectors. SIRIM alsonurtures small and medium enterprises(SMEs) growth with solutions for technologypenetration and upgrading, making it an idealtechnology partner for SMEs. Given SIRIM’s various roles, mandates andactivities, categorising its functions intodevelopment, commercial and statutory areaswill allow stakeholders to better understandand utilise the organisation’s existingservices.

DEVELOPMENT

Malaysian SMEs within the manufacturingsector. Its core activities include undertakingmarket driven research, providing consultancyand contracting research by collaborating withindustry especially SMEs, academia andgovernment agencies to ensure industries areready for global competitiveness and achievesocio-economic growth. The SIRIM Industrial Research consists ofIndustrial Centres of Innovation (IC-Innovation)and Technology Centres that focus on specificareas, driving product and process developmentbeginning from concept to design, engineeringas well as prototyping services in its allocatedsegments. Its end goal is to support the localindustrial innovation ecosystem throughresearch and development and new technologyinnovations that develop and sustain businesses and industries, especially SMEs. SIRIM’s IC-Innovation areas includeNanotechnology, Sensor, BioMedical, SmartManufacturing, Bio-Natural Gas and EnergyManagement. SIRIM also has dedicatedTechnology Centres for Machinery Technology,Environmental Technology and IndustrialBiotechnology. In line with the Government’s initiative toembrace technology in catalysing the growth ofSMEs and boosting industrial productivitythrough technology penetration and upgrading,the SIRIM-Fraunhofer programme was inceptedin 2015. The programme is based on twosignificant features – enhancing innovationservices and strengthening networks withstrategic partners. By leveraging on the Fraunhofer Model’sexperience in spearheading innovation andtechnology development in German industries,the programme comprises of four mainactivities:

SIRIM Industrial Research

SIRIM – Fraunhofer Programme

Implementation of Innovation Management/Technology AuditTechnology UptakeNurture Growth of Small Micro EnterprisesCross-cutting Programmes

i) ii)iii)iv)SIRIM Industrial Research plays a major role

in promoting technology upgrading for

Malaysian Standards

MIDAE-NEWSLETTER August 2019 | 12

Technology Audit Technology Audit is among the initiativesintroduced and jointly developed forMalaysian SMEs by SIRIM and the FraunhoferInstitute of Germany. The audit provides themanagement of participating companies withan understanding of their strengths andweaknesses as well as potential points forimprovement. Participating companies willhave the opportunity to work with SIRIM inupgrading their technology capabilities,exploring potential improvements throughmechanisation, automation and upscaling.These companies will be assessed on theirreadiness to undertake R&D and to identifyrelevant areas of R&D that will benefit thecompany in the long term. The outcome of this audit will ultimately helpthe participating companies to set upactionable plans to enhance productivity,improve technology management capabilitiesand move up the value chain. Follow-up activities are also provided toparticipating companies to further enhancetheir efforts to become more competitive,innovative and productive and to make theirproducts more accessible to the market. To enable SMEs to increase their productivityand improve their products throughtechnology applications and quality initiatives,

SIRIM Development and Technology Applicationcontinuously engage with SMEs to assist in thefield of product and process enhancementthrough programmes such as:

SME Development and TechnologyApplication

Entrepreneurship Development Programme– training, consultancy, coaching and

hand-holdingServices Gap Analysis Audit/Pre-applicationAuditQuality Enhancement ProgrammeProduct Development Programme Productivity Improvement and OptimisationProgrammesCertification Programme e.g. Halal, GMP,HACCPExport Ready Consultancy ProgrammeIncubator Services Consultancy

COMMERCIAL

SIRIM Standards Technology Sdn. Bhd. is a one-stop centre backed by years ofexperience and professional technical staffcomprising engineers and technologists. Itoffers comprehensive and diverse range ofcalibration and measurement services, FailureAnalysis as well as Non-Destructive Testing(NDT) services at its well-equippedlaboratories. The ISO 17025 accreditation was awarded toall SIRIM Standards Technology’s laboratoriesin recognition of its competence andleadership in laboratory management andoperations. With laboratories and personnellocated in Shah Alam, Pulau Pinang, Johor,Kuching and Kuantan, SIRIM StandardsTechnology is well-situated to servecustomers and fully meet their expectations. A subsidiary of SIRIM Berhad, SIRIMMeasurements Technology Sdn. Bhd. (SMT)focuses on providing measurementinstrumentation solutions, as well as technicalservices such as product start-up assistanceand support, training, consultation, testsystem development and integration,calibration and repair of multi-vendormeasurement products for scientists,engineers and researchers.

Calibration Services

Malaysian Standards

MIDAE-NEWSLETTER August 2019 | 13

SMT provides a wide spectrum oftechnologies and solutions ranging fromelectronics to life sciences and chemicalanalysis, which enable discoveries and pushesfrontiers of science. Headquartered in KualaLumpur, the company has an office inPermatang Pauh, Penang. This is in addition to the function of theSIRIM’s Calibration and Repair Lab as follows: Serving as a national enquiry point ontechnical barriers to trade as well assupporting knowledge expenditure intechnical areas through its Technical Libraryand training, SIRIM STS is the leading one-stop resource centre for services relating tothe development of Malaysian Standards (MS)and SIRIM Industry Standards. SIRIM STSaspires to assist organisations towardsimplementing excellent business culture byassociating quality, technology and bestpractices in their daily work demands. As part of the product development andinnovation process, SIRIM undertakesStandards Research and Developmentinitiatives on existing local and internationalstandards to find one that is suitable toindustries’ needs. If no standard exists, SIRIMdevelops new standards to nurture productecosystems and encourage industrialcollaboration. As such, SIRIM's expertiseincludes:

Apart from standardisation activities, SIRIMSTS also aims to upgrade the technologicalskills and capabilities of local industries.Backed by a pool of experienced team ofspecific industry trainers and consultants, theobjective is realised through the provision ofpublic courses, seminars, workshops,conferences, in-house, packaged trainingprogrammes and consultancy services. In driving commercialisation of promisinginnovations from a broad range of technologysectors, SIRIM Tech Venture Sdn. Bhd (STV)focuses not only on SIRIM’s developedtechnology but also explores strategiccollaborations with technology partners oncommercialisation. Currently, STV focuses onMicro Precision Grinding and FilamentWinding Technology. A wholly-owned subsidiary of SIRIM TechVenture Sdn Bhd (STV), Granulab (M) Sdn Bhd(Granulab) was established in 2006 and is thesole bone graft manufacturer in SoutheastAsia. Granulab produces high-quality bonesubstitute materials for Orthopaedic and OralMaxillofacial surgery through bone graftingprocedures. The main product, GranuMaS® isthe first of its kind bone graft materialcertified CE by BSI and Halal by JAKIM. Tomeet surgeons’ needs, Granulab alsoproduces Synthetic Bone Construct (SBC)which is custom-made for specificapplications, giving rise to its warm receptionsix months into its release. With certification, inspection and testingservices accredited and recognised under

Technology Transfer andCommercialisation

Provision of calibration services for allpower, electrical and radio – Frequency RFinstrumentationComplete ONE - Stop Lab for test andmeasurement instrumentationFully equipped lab with ISO 17025certificationCapability in servicing multi-vendormeasurement product (MVP) for scientists,engineers and researchersTechnical outsourcing, instrumentationmaintenance and customise services.

Malaysian Standards and IndustryStandards Development, Training andConsulting

Developing new national and proprietarystandardsDeveloping standards and technicalspecifications for industryDeveloping guidance documents for qualityassurance and product testing

Case in Point: Granulab (M) Sdn Bhd(Granulab)

Conformity Assessment

Researching available local and internationalstandards

Malaysian Standards

MIDAE-NEWSLETTER August 2019 | 14

numerous bodies, including the NationalAccreditation Body, the Department ofStandards Malaysia, the United KingdomAccreditation Service (UKAS) and theInternational Certification Network (IQNet)among others, SIRIM QAS is a wholly-ownedsubsidiary of the SIRIM Group established inMarch 1997 with local and internationalcustomers from a wide cross-section of theeconomy. Customers enjoy all the benefits ofa recognised world-class certification,inspection and testing body, demonstrateSIRIM QAS’ high degree of competency,impartially and credibility in the area ofconformity assessment. SIRIM QAS offers thefollowing services: Focusing on continuous innovation andimprovement in the area of packaging andsecurity design services, the SIRIM Packagingand Security Design Centre strives to groomand nurture new entrepreneurs who areinterested to grow their businesses to ahigher level from beginning to export-readythrough services as follows: Similarly, the SIRIM Security Services DesignCentre specialises in a variety of securitysolutions that protect businesses from brandcounterfeiting as well as product piracy andtampering. The techniques and technologyutilised to ensure their customers’ successinvolve Security Printing Techniques, SecurityMaterials and Packaging and Track and TraceTechnologies.

Packaging and Security Design

Management System Certification Testing Services Product Certification Inspection Services Personnel Certification

Innovative Packaging Consultancy and Training

Biz Transformation ProgrammeBiz Quality ProgrammeGreen Pack Programme

Green Blue Packaging Green Blue Packaging fosters a transitionfrom conventional packaging to be amore environmental-friendly packagingand sustainable.

STATUTORY

As part of SIRIM’s mandate in developingstandards, the Measurement StandardsLaboratory (MSL) was established in 1975 andthereafter grew into the National MetrologyInstitute of Malaysia (NMIM) in 1978. TheNMIM represents Malaysia at many notableinternational memberships such as the MetreConvention/General Conference of Weightsand Measures (CGPM), InternationalCommittee of Weights and Measures: MutualRecognition Arrangement (CIPM-MRA), AsiaPacific Metrology Programme (APMP),International Organisation of Legal Metrology(OIML), Asia Pacific Legal Metrology Forum(APLMF), ASEAN Consultative Committee onStandards and Quality (ACCSQ) and theNational Conference of StandardsLaboratories International (NCSLI). NMIM also undertakes initiatives tostrengthen technical expertise inmeasurements capabilities to meet therequirements of calibration laboratoriesdomestically and internationally. Through thedevelopment of national capabilities andpromotion of the implementation ofmetrology legislations in-line withinternational best practices, it ensurestraceability of measurements to SI, thecompetitiveness of Malaysian products andservices and the quality of life of Malaysiancitizen and the world at large.

MIDAE-NEWSLETTER August 2019 | 15

Events

Innovation Pitch andBusiness Matching 2019 -Companies to IntensifyInnovation throughStrategic Collaborationsin R&D Activities toRemain Competitive andSustainable

Themed ‘Innovation for the Future of Malaysia’,MIDA in collaboration with the Universiti MalaysiaPerlis (UniMAP) and the Malaysian TechnologyDevelopment Corporation (MTDC) organised theInnovation Pitch and Business Matching (IPBM)2019 event at MIDA Sentral on 5 August 2019. The event was a platform for technologists,scientists and researchers from universities topromote their inventions, innovations andresearch outputs to potential investors andindustry players. “It is more crucial now than ever for companies toreassess and realign their business strategies toadapt to the current challenges of doing business.Intensifying innovation through strategiccollaborations in R&D activities is one of thecritical components that would enable businessesto remain competitive and sustainable,” saidDato’ Azman Mahmud, Chief Executive Officer ofMIDA in his remarks during the event.

He also highlighted MIDA’s role in assisting localcompanies in marketing their R&D services toclients and developing the R&D ecosystem withinthe country. “We have been encouragingcompanies to conduct R&D activities since the early’90s through the introduction of various R&Dincentives. These incentives include R&D Status,R&D Company, Contract R&D Company and In-house R&D. "Incentives available are in terms of Investment TaxAllowance (ITA) or Pioneer Status (PS). To spur R&Dactivities, clients to the companies which have beenapproved with the R&D Status are eligible to claimdouble deduction directly to the Inland RevenueBoard (IRB) on the payment made for the use oftheir services,” said Dato’ Azman. Prof. Ir. Ts. Dr. R. Badlishah Ahmad, Vice-Chancellorof UniMAP in his speech shared that IPBM 2019was part of the engagements spearheaded byUniMAP’s Centre for Intellectual Property andCommercialisation (CIPC) to facilitate the processof bringing research developments to market, inaddition to CIPC’s role to administer the IntellectualProperty (IP) application process. “I hope that through IPBM 2019, industry playerscan explore numerous potential research outputsand innovations that may impact and revolutionisetheir industries. Moreover, for the researchers, I hope they will gain the ability to do research orinventions that will meet the needs of theindustries and societies,” he said. The IPBM 2019, attended by over 250 participants,included pitching presentation and businessmatching sessions as well as a presentation ofLetter of Interest for Future Collaboration fromindustries. Investors that conferred Letter of Interest forFuture Collaboration to selected research andinnovation outputs will proceed with possiblecollaborations with the universities for production,intellectual property licensing; or for futureresearch that would potentially lead to the creationor advancing existing technologies.

MIDA Invest Series:Unfolding Selangor’sBusiness Potential

MIDA organised its ninth briefing of MIDA InvestSeries: Unfolding States’ Business Potential at itsheadquarters on 7 August 2019. Mr. Arham Abdul Rahman, Deputy Chief ExecutiveOfficer (DCEO) of MIDA during his openingremarks said that Selangor is indeed one of themost preferred investment locations formanufacturing activities. Continued interest byinvestors had enabled Selangor to register aremarkable level of reinvestments by local andforeign companies, whereby reinvestments in themanufacturing sector constituted 40.3% of totalinvestments in the sector for the state. The strong presence of multinational corporations(MNCs) and large local corporations (LLCs) in thestate such as Spirit AeroSystems, Nestle, IKEA,Panasonic, Q-Cells, KL-Kepong Oleomas, NipponElectric Glass, Perodua Global Manufacturing,Proton, Top Glove and Hartalega hold muchpromise for business collaborations andopportunities.

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Events

The beginning of Selangor as an industrialisedstate dates back to the late 1970s wheresignificant changes were made to its economicpolicy with preference given to industrial, housingand recreational development. As of March 2019,a total of 9,097 manufacturing projects withinvestments of RM218.4 billion in Selangor wereapproved by MIDA, creating more than 802,000employment opportunities. Majority of theemployment was in the electrical and electronics(196,158) followed by transport equipment(91,752), rubber products (82,055) and machineryand equipment (52,620) industries. The event, which was well attended by over 200participants from various fields featured a paneldiscussion with a broad range of speakersrepresenting government agencies (InvestSelangor Berhad, Selangor Human ResourceDevelopment Centre, Selangor Maritime Gateway),developer (Smart Selangor (M) Sdn. Bhd.) andGovernment-Linked Corporation (Smart SelangorDelivery Unit). Also present were Dato’ Hasan Azhari, CEO ofInvest Selangor Berhad and Mr Tan Beng Teong,CEO of Selangor Human Resource DevelopmentCentre (SHRDC).

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Highlights of August

On 1 August 2019, MIDA organised a mediabriefing on Automation Capital Allowance incentive atits headquarters. The event aimed to update mediastakeholders on the automation incentive facilityoffered by the government through MIDA.

MIDA, in collaboration with the Malaysian IndianNetwork of Entrepreneurs (1MINE) organised abriefing and networking session on 2 August 2019 toincrease awareness of local companies on latestupdates on government policies, incentives, facilitiesand support services available. The half-day seminar brought together 250participants from the value chain of themanufacturing and services sectors.

The Director of MIDA Pulau Pinang was invited as oneof the speakers at the Seminar on Industry4WRD andincentives organised by the Penang Chinese Chamberof Commerce on 2 August 2019. The event attracted over 100 participants.

On 3 August 2019, the Director of MIDA Pulau Pinangattended the official Groundbreaking Ceremony ofNextGlass Technologies Sdn. Bhd. at Batu Kawan,Penang. According to Mr John Park, the CEO in hisremarks during the event said “MIDA is the reasonwhy we are here in Malaysia”.

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MIDA kick-started its series of Business FinancingOpportunities Forum on 8 August 2019. Aptly themed‘Equity Investment for Business Growth’, the Forumprovided an accessible avenue forbusinesses to obtain information to enhance theircompetitiveness and capacity through equityparticipation.

Mr S. Siva, Executive Director of InvestmentPromotion, MIDA participated in the panel discussionon Investment Opportunities for Chinese investors atthe Malaysia-China Belt and RoadEconomic Cooperation Forum 2019 on 8 August 2019.The session was moderated by Dato’ Abdul MajidAhmad Khan, Chairman of MIDA.

YB Lim Guan Eng, Minister ofFinance and YB Dr Ong KianMing, Deputy Minister of MITI ledthe engagement with Chineseinvestors at the RoundtableMeeting held in Shenzen, Chinaon 15 August 2019. The event,which was held in partnershipwith the United Overseas Bank,was moderated by Ms Lim BeeVian, Executive Director,Strategic Planning (Services) ofMIDA.

On 16 August 2019, MIDA, led byDato ’Azman Mahmud, CEO ofMIDA was invited to joinHalliburton to celebrate its 100thAnniversary. Halliburton andMalaysia shared a long-standingpartnership since 1995 with theestablishment of its operationalheadquarters, followed by theinception of Halliburton‘s state-of-the-art manufacturing plant inSenai, Johor in 2008.

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Mr S. Siva, Executive Director, Investment Promotionof MIDA was one of the speakers at the InternationalElectronics Elite Forum 2019, held on 16 August 2019.The forum was organised by Shenzen TerminalElectronics Manufacture Association, in collaborationwith Invest Penang and supported by MIDA.

On 21 August  2019, MIDA  organised a Workshop onInvestment Opportunities in Food and Resource-Based Industries and Automation Capital Allowanceat Grand Dormani Rajah Court Hotel in Kuching,Sarawak. The event also featured Business Clinicsessions and SME Desk with participation by relatedgovernment agencies to assist investors inquiries.

The Briefing/Dialogue session on green technologyincentives held in Seremban, Negeri Sembilan on 21 August 2019 was well attended by 150 participants.

On 21 August 2019, MIDA hosted a networkingluncheon in conjunction with the US-ASEAN BusinessCouncil 2019 Malaysia Business Mission, from 19 to 22 August 2019. Mr Alexander Feldman, the CEO and President of US-ASEAN Business Council, led the delegation, which consists of 46 participantsfrom various US companies.

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Mr S. Siva, Executive Director of InvestmentPromotion, MIDA led a three-day visit to theNorthern Region from 21 to 23 August 2019. The programme aimed to engage existingmanufacturers, park developers and stategovernments to discuss future economicdevelopment and challenges as well as tostrengthen business networks between MIDA and relevant stakeholders in the region.

MIDA in collaboration with MITI and InvestSelangor organised the Selangor InvestmentSeminar 2019 on 22 August 2019, at Dorsett GrandSubang Hotel in Subang Jaya, Selangor. More than 500 participants from various industriesattended the event.

The Machinery and Metals Division of MIDA organised the Smart Manufacturing Symposium2019, focusing on executing the vision ofsmart manufacturing and government facilitationto support the adoption of smart manufacturingtechnology in Malaysia. The event was held on 27August 2019 at MIDA headquarters.

Mr Zabidi Mahbar,Deputy CEO MIDAparticipated in themeeting with Malaysiancompanies in Vietnamin conjunction with theofficial visit of YAB Tun DrMahathir Mohamad,Prime Minister ofMalaysia to Hanoi,Vietnam from 26 to 28August 2019.

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MIDA, led by Mr S. Siva, Executive Director,Investment Promotion, shared about the excitinginvestment opportunities in Malaysia withparticipants of the Malaysia-China Smart Silk RoadForum 2019, held on 29 August 2019.

On 30 August 2019, MIDA, led by Mr MohamadIsmail, Executive Director ManufacturingDevelopment (Resource), attended Baerlocher’sgrand official opening of its expansion and newoffice building in Seremban.  Baerlocher is one ofthe leading global additives manufacturers. Thisshowcases that Malaysia is well-positioned to meetthe growth of Baerlocher in the Asia-Pacific region.

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Upcoming Events

Malaysia to set up special channel to facilitate more Chinese investments

Pahang to receive RM1.134b investments from Singapore

Deputy minister: Incentives, matching grants under Budget 2020 to boost DDI

'GDP growth seen picking up in Q2'

GDP grows 4.9pc in Q2Malaysia remains attractive to foreign investors – LimFitch raises Malaysia 2019 GDP growth forecast to 4.6%

MIDAE-NEWSLETTER

MoF: Increase in Fitch GDP growth projection due to steady rise in FDI

INDUSTRY NEWS

 August 2019 | 23

Newslinks

MIDA IN THE NEWS

Chinese companies relocating operations to Malaysia amid trade war

Malaysia to focus on economic integration, inclusivity & sustainability at APEC2020

Investments up by 7.6pc

Penang targets RM10b in total investments in 2019Malaysia to woo foreign investors even beyond US-China trade war

Many opportunities for Singapore companies in Pahang – SMF

SWS to buy 52pc of Mata Aerotech

Strategy paper for aerospace industry to be developed — AzminUkraine aircraft manufacturer receives offer to operate in Kedah

Malaysia to see healthy investment inflow from Chinese firms in H2 – Ong

Malaysian firms on Forbes ‘Best Over A Billion’ list

MIDA calls for manufacturing companies to utilise automation CA incentiveMIDA consistent in assisting SMEs embrace Industry 4.0

Sedco, CIS mull clinker plant

ECONOMY NEWS

MALAYSIA RANKING

Biotek Dinamik invests RM350m in bio-CNG JV

UOB Malaysia expects total investments to reach RM195 bln

Tashin plans new factory

Airbus opens copter hub

MIDA crowned Top Asia Pacific's Investment Promotion Agency by internationalpublicationEquity investment a viable funding option for business expansion – MIDA

Malaysia’s growth set to revive as trade war clouds gather

Don't forget manufacture, export of locally-made vehicle parts – Darell

Pestech inks MoU with Chinese firm to explore floating solar system solutionsToyo Tyre needs local highly skilled workers

MITI: Automotive parts and components exports on track to meet 2019 targetsReinvestment constitutes 40.3% of total investment in manufacturing inSelangor

Hong Kong company invests RM23.77 million to open manufacturing plant inMelaka

Major industry players need to tailor technology shiftMalaysia appoints DreamEDGE as anchor company for new national car projectwith advanced tech support by Daihatsu

Rubber glove industry targets RM20 bln revenue this year

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SCIB ramping up production

SERVICES NEWS

Globetronics bullish despite tough timesGreen light for RM2b bunker islandAjinomoto to invest RM355mil in new plant and corporate officeMiti optimistic of aerospace industry growing 10-15% this yearEcosystem: SilTerra enables SMEs to develop new techPoised for solid growthTop Glove set to boost R&D spendingLONGi invests additional RM500milManufacturers brace for slowdown after sluggish 1HTa Win in expansion modeSarawak will start research on algae to produce biofuelSime Darby sets aside over RM1b for capex

INDUSTRY NEWS (CONT')

Malaysia aims to be preferred destination for high-tech investment

Kota Perdana logistics hub to be ready in two years — MukhrizMalaysia services sector up 6.5 per cent 2Q19, revenue RM441.3 blnThailand eyes Sabah potential in medical tourismMARii extends collaboration with Swinburne to establish industry 4.0training academy

Special zones to attract tech investments in tourism

Avisena plans to open three more hospitals in five yearsKPJ Pasir Gudang allocates RM10 million for upgradesMalaysia taps digital technology in tourism development – Mahathir

A D V E R T I S E W I T H U S

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H O S T W I T H U S

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A B O U T M I D A

ABOUT MIDA

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MIDAE-NEWSLETTER August 2019 | 27

The Malaysian Investment Development Authority (MIDA) is the Government's principal promotion agencyunder the Ministry of International Trade and Industry (MITI) to oversee and drive investments into themanufacturing and services sectors in Malaysia. Starting operations in 1967, MIDA is the first point of contactfor investors who want to take advantages of Malaysia's vibrant economy, world-class infrastructure andbusiness-friendly environment to set up their profit centre in Asia. For more information, visit                                                                   or email us at investmalaysia@mida.gov.my. MIDA, your first point of contact for investments in Malaysia. Malaysian Investment Development AuthorityMIDA SentralNo. 5, Jalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala LumpurTel: 603 2267 3633 / 2263 2555 / 2263 2549Fax: 603 2274 7970E-mail: investmalaysia@mida.gov.myWebsite: www.mida.gov.my Tell us what you think of our newsletter. Your                   will help us improve our services to you.  This email was automatically generated for you, please do not reply. You're receiving this newsletter because youremail is registered with the MIDA website at www.mida.gov.my. Please add info@mida.gov.my to your address bookso that our emails get to your inbox.

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