According to the Semiconductor Equipment and Materials International Association’s (SEMI) Market Outlook, integrated circuits (IC) sales for the first half of 2023 decreased 25% year-on-year (y-o-y) as memory sales plummeted more than 50%.
Capital expenditure for semiconductor fell 5% y-o-y in the second quarter of this year and is expected to further tumble 15% y-o-y in the third quarter of 2023. However, not all hope is lost for the industry, as 2024 is the year experts and industry players believe will make a comeback. The semiconductor market is expected to grow at a compound annual growth rate of 10% from 2023 to reach US$1 trillion by 2030, according to SEMI.
The research firm, Gartner, has projected the semiconductor industry will grow by 17% next year after a decline of 11% in 2023, while until 2026, the compound annual growth rate is estimated to be 13%.
Despite global semiconductor shipment revenue projected to be down 12% to 13% in 2023, Malaysia is expected to be down by only 2%.
Exports in 1972 was RM230mil, with employment at around 10,000 people. In 2022, 50 years later, exports reached almost RM600bil. Malaysia’s external trade surplus amounted to RM255bil, of which RM199bil came from our E&E sector in 2022. This is 78% of the total surplus. In 2022, the E&E sector contributed 38% of the country’s total exports, also becoming the largest sector to do this. The E&E industry hires more than 600,000 people.
So, we need to be conscious of its tremendous impact, attract more R&D centres into Malaysia, equip our people and work on a plan to move our semiconductor industry to a higher plane. Others too are keen to develop this sector for the betterment of their economies.
Reference:
Chip sector – moving from crisis to recovery, Lydia Nathan, The Star, 11 November 2023
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