For the next generation of engineers, the incentive is even clearer: Salaries for fresh graduates in the front-end sector start at RM5,000, higher than the RM3,000 for those in back-end assembly.
Currently, Malaysia’s “front-end” ambitions are taking shape across the Puchong and Cyberjaya IC Design Parks located in Klang Valley.
These hubs are now home to 15 local firms.
The anchor tenant Maistorage is a subsidiary of Taiwan’s Phison, while other tenants include Malaysian semiconductor designer SkyeChip and ARM, a British company that specialises in providing semiconductor intellectual property cores and related technologies.
About five to 10 of these players are focused on the automotive segment, designing the power management and sensor chips required for the next generation of EVs.
While foreign direct investment remains a vital engine for the economy, the real “win” for Malaysia lies in technology transfer, said Azrul Reza Aziz, CEO of the Malaysia Automotive, Robotics and IoT Institute, a key agency under the Ministry of Investment, Trade and Industry.
“For the automotive sector here, we are looking at the downstream industries,” he said, citing rare-earth mining company Lynas’ memorandum of understanding with South Korean permanent magnet manufacturer JS Link last July for rare-earth permanent magnet production in Malaysia, near its site in Kuantan.
Under the deal, they will collaborate on a 3,000 tonne-capacity neodymium magnet manufacturing facility. Such magnets are used in wind turbines and EV motors.
According to Azrul Reza, there are “two big components” when it comes to EVs – the battery and the electric motor, which converts electrical energy into mechanical energy to drive the vehicle.
“China controls these two items. When you control these two items, you control the value chain,” he said, adding that Malaysia’s target is to manufacture its own electric motors.
“We want to be the fourth or fifth force within the global ecosystem of EV.”