Malaysia’s electrical and electronics (E&E) or semiconductor players are positive on outlook for third quarter and beyond, a survey showed Monday.

The Malaysia Semiconductor Industry Association(MSIA) said in its inaugural MSIA E&E/ Semiconductor Quarterly Pulse Survey for the Second Quarter of 2024 that 60 percent of companies surveyed are optimistic about the third quarter of 2024.

This optimism for the third quarter of 2024 is driven by demand for consumer electronics, automotive and artificial intelligence (AI).

Overall, 39 percent of companies reported better business performance in the second quarter of 2024 compared to the first quarter of 2024, indicating a positive industry sentiment.

The biggest challenges in the second quarter of 2024 were talent shortage and market competition/order book.

The survey also showed 85 percent of companies surveyed are hiring engineers and technicians in the third quarter of 2024, while 58 percent of companies surveyed have an optimistic investment outlook for the third quarter of 2024.

It said companies are eyeing opportunities to expand into new markets, invest in new technology and develop new products.

Meanwhile, 72 percent of companies surveyed have an optimistic overall outlook in the next 12 months.

It is noted that generative AI is a also special focus in this second quarter survey.

74 percent of companies surveyed have a positive sentiment towards the adoption of generative AI in the semiconductor industry and that Generative AI will have an impact across the entire company’s operations and strategy.

The E&E industry is one of the bellwether sectors in Malaysia.

In 2023, Malaysia’s E&E exports was MYR 575 billion ($123 billion U.S. dollars), accounting for 40 percent share of total exports, more than next nine biggest exports combined.

The sector employs a workforce of more than 600,000.

The sector is poised for further growth with approved foreign direct investment (FDI) and domestic direct investment (DDI) in the E&E sector of MYR 262 billion ($56.06 billion) over the past three years from 2021 to 2023.

MSIA is an industry association which cover individuals and companies incorporated in Malaysia who are involved directly or related to semiconductor industry (electronics and systems), semiconductor industry supply chain, institutions providing significant related services to semiconductor industry such as engineering, finance, legal and those societies, associations, chambers and government – linked agencies.

The objective of this survey is to assess the sentiment, trends, challenges, and opportunities within the Malaysia E&E/ semiconductor industry on a quarterly basis.

Malaysia to allocate $5.3B funding to operationalize the National Semiconductor Strategy