Malaysia gives local semiconductor industry a run for its money

The tight labour market is to blame.

Cutthroat competition from next-door neighbor Malaysia could put the republic’s semiconductor industry at risk, a report by BMI Research revealed.

“Externally, Singapore is facing increasingly stiff competition from neighbouring Malaysia in its electronics manufacturing industry. This is particularly true with regards to the semiconductor industry, where both exports and production have remained mired in a downtrend despite a global pick-up,” the report revealed.

For instance, total electronics production contracted by 5.2% y-o-y in March, dragged down by semiconductor production, which was the only sub-sector to register a decline.

“While strong integrated circuit (IC) exports in March (+24.4% y-o-y) reflect a reprieve in the broader semicons space, another disappointing month of production suggests that this trend could be short-lived,” the report noted.