MALAYSIA PRODUCTIVITY CORPORATION D R I V I N G P R O D U C T I V I - - PowerPoint PPT Presentation

MALAYSIA

D R I V I N G P R O D U C T I V I T Y O F T H E N AT I O N

PRODUCTIVITY CORPORATION

EEPN GC Meeting 2/2019

• YBhg. Dato’ Seri Wong Siew Hai

(Chairman of EEPN)

Boardroom, Inari Amertron Berhad, P201| 21st March 2019 | 10:30a.m. ~ 1:00p.m.

1 EEPN - SULIT

Agenda: GC Meeting 2/2019

2 EEPN - SULIT

TIME ITEM AGENDA PRESENTER 10:30am ~ 10:40am 1 Opening Remarks. The Chairman 10:40am ~ 12:20nn 2 Brief update by each Key Strategy (25 mins X 4) Respective KS Chairpersons 12:20pm~ 12:35pm 3 Executive summary: “Study on Productivity and Contribution of the Malaysian E&E Industry” (Final Report) UTAR 12:35pm ~ 1:00pm 4 Other matters arising, and next meeting The Chairman

MALAYSIA

D R I V I N G P R O D U C T I V I T Y O F T H E N AT I O N

PRODUCTIVITY CORPORATION

KS#1 Update to GC Meeting 2/2019 Chair: Dr. Hari Narayanan Co-chair: Mdm. Jasbir Kaur (Executive Director, MIDA)

Boardroom, Inari Amertron Berhad, P201| 21st March 2019 | 10:30a.m. ~ 1:00p.m.

3 EEPN - SULIT

KS#1 Work Plan 2019

Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

Enhance Higher Value- Added Activities

Key Strategies Action Items

2019 Measure KPI

• 1. MCAD tools provisioning for SME’s. Enroll D&D SMEs to participate in pay-

per-use model Lead by MIMOS 6 # of SMEs participating 2,500K Budget (RM) Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

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• 2. Prioritized executions of the Test Lab Study Results. 7 Actionable Items

identified upon completion of report in Feb 2019. Lead by EEPN, support by SIRIM, MIMOS & Stakeholders 7 Actionable Items

• Budget (RM)
• 3. Post Finishing School for Talents for IC Design

Lead by CREST, supported by MIDA & MIMOS 500 # of fresh engineers trained 3,950K Budget (RM)

• 4. MIDA’s incentive enhancement : Assisting in providing inputs for incentive

paper for E&E (while waiting for official revision of promoted list) Lead by MIDA Proposal Adopted Proposal adopted by MITI and MOF, by Q3’19

• Budget (RM)
• 5. IC Design Consortium: Sharpen and enable the focus to win business

Lead by MIMOS 3 # of business wins

• Budget (RM)
• 6. Universities Curriculum Enhancement for IC Design: Develop a proposal with 9

U’s with the support of BEM and MQA. Budget for travels and meetings Lead by MOE

Proposal Adopted Proposal adopted by MOE; for implementation in 2019/2020 session

50K Budget (RM) 6,500K Total Budget for 2019 (RM)

Key Points

• IME (distributor of Solidworks M-CAD tools)

– Commercial mindset: sale of MCAD tools & training – Not focusing on assisting SME's with cost effective tool usage – Does not appear to have a solution for a national level usage model.

• Need to rethink the steps we've taken to date.

Next Steps

• MIMOS to work with ~ 6 universities and identify their strengths and
• pportunities in mechanical design; together with industry inputs, to enhance

their curriculum.

• To organize one more round of discussions with SME's who have mechanical

design and development as part of the functions (by 1st week of Apr)

• MIMOS to provide a consolidated view MCAD capabilities and services

– SIRIM & MIMOS

• Review systemic requirements in the E&E and M&E eco system (EEPN & MEPN)

M-CAD Tools with MIMOS

List of key M&E Companies

• 1. Vitrox
• 2. Aemulus
• 3. Existec
• 4. PentaMaster
• 5. Experia
• 6. Warta
• 7. TT Vision
• 8. KT Microhandling (Kobay)
• 9. Coraza

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USAINS presentation to stakeholders (24th Jan 2019)

Test Lab & Capabilities Study

Test Lab: ‘Action Items’ for EEPN KS#1

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# Action Item / Description Owner Status

1 Expand the Inventory of Test Lab to include MIMOS’s FA, Reliability Testing and Scanning; plus SIRIM’s FA and Reliability Testing capabilities. Work with MIMOS to publish their expertise to the industry MIMOS, MIMOS List completed. Need consolidation. Delayed! Revised date14th Apr 2 Validate the capabilities of the labs as listed in the Study (by cross-checking with SIRIM QAS, PSDC EMC, etc) before publication to public KS#1 16th Mar, David Khor distributed excel data to SIRIM QAS, PSDC EMC and QAV for validation. To be validated by end of Mar 2019 3 Work with SIRIM to identify their bottlenecks and improve testing lead-time (including engagement and waiting time) KS#1 and SIRIM Met SIRIM team in MIDA; Survey feedback to be verified as SIRIM tests a variety of products. Data sent on 19th March inadequate. Review in the week of 15th Apr. 4 Work with PSDC EMC Lab on their variable costing model, specifically to provide flexible time slot engagement model for local SMEs KS#1 and PSDC PSDC reassessing their services 5 Identify overall national strategy for Test Lab capabilities. Based on MITI whitepaper, partner w/ MITI to formulate this national agenda and strategy KS#1 and MITI Provided our findings to MITI 6 Form a committee of experts to prioritize the existing gaps and provide investment needed to address these gaps KS#1, USAINS and David Khor 18 Feb David met Dr. Hari @ MIDA 28 Feb David met Ho Hock Guan of Motorola. Experts from Motorola and Keysight as

• mandatory. Tentatively early April 2019

7 Create a cluster of test labs experts to help SMEs, by providing them with coaching and guidance on best approach to ensure minimal iterations of their testing and qualifications cycles KS#1, MIMOS and SIRIM

• Dr. Panir to identify experts (SIRIM and

MIMOS) re: test & certification in E&E M&E; and map into flowchart from concept to

• productization. (14th Apr)

Test Lab Study : SIRIM

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Expanding hardware capabilities to undertake 5 additional ROHS3 requirements

• Based on the low number of test requests, and high investment required, it was decided not to

pursue upgrading SIRIM for ROHS 3 tests at this time. Bottlenecks and Improvement of Test Cycletime

• SIRIM’s two categories of customer base

– EMC-related testing, and – General Electrical testing

• SIRIM does not believe there is a cycletime issue in EMC testing; the issue could be with general

electrical testing

• SIRIM to compile test cycletime data over a 6 month period (of different categories and sub-

categories) and compare with best in class cycletime performance

• Prelim review of data on 19th March; full review in the week of 15th Apr
• SIRIM to develop a biz case for ta 10m chamber especially for automotive industry. Review with EMC

technical experts (end Apr). (PSDC has a 10m chamber)

TÜV Rheinland’s Event in Penang

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Seminar and Networking Lunch A taste of Product Testing, Inspection and Certifications Date: 26 March 2019 Time: 9:30am ~ 2:00pm Venue: Olive Tree Hotel, Penang Objective The key objective is to provide a dedicated platform for business in the same industries to understand, share, learn and discuss Product Testing related topics. Be it in Electrical testing, Industrial Inspection and Safety, or Medical Devices Testing, learn more about what TÜV Rheinland can provide to your business

Hosted by TÜV Rheinland as technical partner with EEPN and SME Corp as event partners

Agenda 09:30 ~ 10:00 Registration and refreshments 10:00 ~ 10:30 Introduction 10:30 ~ 12:00 Break-up Session into 3 different industries 12:00 ~ 14:00 Networking Lunch

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Post School Finishing School

Program Managed by

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Post School Finishing School Program

• Targeting 500 fresh graduates per year for 2 years
• Budgetary number: RM 7.9 million(for 2 years)
• More than 3 universities may be needed to “train” the fresh graduates
• Industry to hire first before being trained; co-share of funding proposed
• MIDA taking the lead to assist in the funding; MEA being approached and in principle

has agreed on the model being proposed)companies

• MEA has requested for some form of “soft bond” of graduates undergoing training;

to stay with the company or in the country for a period of time after training completion

• MEA has requested for funding to be biased towards the needs of local IC Design

Companies – given 1st priority to local

• HRDF avenue is restricted for now

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MOE/CREST Academia/Industry Workshop

(19th Mar 2019)

• Jointly chaired by Prof. Dr. Arham (Director MOE) and Dr. Norazmi (CREST), supported

by Dr. Hari (EEPN)

• Meeting Objectives

– Present National IC Design Talent Development Program framework to academic partners – Gathering challenges from Universities, feedback on proposal and how we close the gaps – Curriculum mapping – ‘needs’ vs ‘existing’ – Agreement and commitment to support the proposed programs

Universities

• Universiti Sains Malaysia (USM)
• Universiti Malaysia Perlis (UNiMAP)
• Universiti Putra Malaysia (UPM)
• Universiti Teknologi MARA (UiTM)
• Universiti Teknologi Malaysia (UTM)
• Universiti Tun Hussein Onn Malaysia (UTHM)
• Universiti Malaya (UM)
• Universiti Kebangsaan Malaysia(UKM)
• Universiti Teknikal Malaysia (UTeM)

Industry

• Cypress Semicon Malaysia Sdn. Bhd.
• Emerald Systems
• UST Global
• SiTune Malaysia Sdn. Bhd.
• Oppstar Technology
• Infinecs Systems Sdn. Bhd.
• Intel Microelectronics
• Symmid Corp
• Synvue Sdn. Bhd.

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MOE/CREST Academia/Industry Workshop

(Breakout groups) 3 Breakout groups

• Digital Front-End and Back-End
• Analog Front-End and Back-End
• Design for Testability (DFT)

To consolidate

• # of training days
• Proposed Industry Co-Lecturer
• Proposed University Partner
• Challenges and Gaps
• Resources Required (tools labs facilities capabilities etc)
• Implementation Action Plan

Next Steps

• CREST to consolidate
• Summarize the Gaps, Recommendations,

Priorities, Timelines etc

• Report back to Dr. Arham and team in two

weeks’ time (i.e. first week of April)

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MOE/CREST Academia/Industry Workshop

(Other Actions) ICD Oversight Committee

• Need to establish an ‘oversight committee’ consisting of selected Academia

and Industry players, to

– Regulate overall EDA tools management – Coordinate MPW (Multi Project Wafers) services – Assignment of Internships to companies – Review curriculum (‘Core’ vs ‘Elective’, what to add, what to drop etc)

• Need to define the Terms of Reference (TOR) of this Oversight Committee

Single point of contact for Universities

• To streamline communication, and to ensure continuity, there will be a single

point of contact for each university

• Agreement reached with key local IC Design companies to work on a legal entity model
• The Legal Entity will be the representative to bid for large projects
• Legal aspects of JV and ownership and accountability to be drawn up
• MIMOS working to identify the Company that will be the legal entity/anchor
• Previously identified candidate has chosen not participate; an alternative is being

looked into.

• MATRADE approached to help publicize and market the local IC Design capabilities;

await specific actions from MATRADE

• MIGHT approached to assist local IC Design companies to link up GLC’s; propose

products/solutions rather than IC Design and/or services.

• How do encourage Govt or GLC’s to provide businesses, where possible, to local

Design companies ?

• Design companies must be solutions or sub-system providers

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Update on IC Design Consortium

• MIDA s working on a incentive scheme for IC Design, Test Development Services and

Embedded Solutions Design Services

• MIDA has sought and received inputs from a selected few EEPN team members
• Proposal tabled in NCI : ok; next stage is MOF
• Target for completion by Q3 2019

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MIDA’s Incentives : ‘Services’

Proposal to be tabled to MITI, and then MOF, for approval (starting March 2019)

• Complete review of IAC initiated and TalentCorp funded curriculum enhancement

program with universities and companies - Done

• This program has not met the objectives for various reasons

– Lack of proper program management to track for successful closure – Each company went with its own “application/tool kit” ; failed to identify the fundamental needs – Poor or lack of support from the Heads of Schools – Lack of traction with MOE at the onset – Training of interested students during summer vacation – not sustainable – Mismatch of expectations of universities: continuous funding from industry

• Review the needs of industries; include local companies – June 2019
• Use similar approach to that of IC Design Curriculum Enhancement and work with MOE

– June 2019 start

• Is there a common need for EEPN and ICTPN ?

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Embedded SW Talent focus

Thank You

MPC TIP @MPC_HQ https://www.facebook.com/MPCHQ @mpc_hq

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MALAYSIA

D R I V I N G P R O D U C T I V I T Y O F T H E N AT I O N

PRODUCTIVITY CORPORATION

KS#2 Update to GC Meeting 2/2019 Chair: Dato’ Seri SH Wong

Boardroom, Inari Amertron Berhad, P201| 21st March 2019 | 10:30a.m. ~ 1:00p.m.

19 EEPN - SULIT

KS#2 Work Plan 2019

Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

Nurture Talent Development

Key Strategies Action Items

2019 Measure KPI

• 1. Industrial Upskilling for Yet-to-be employed engineering graduates

(25 Mechanical & 75 Electronics Engineers) Lead by EEPN supported by HRDF 100 # of heads trained 5,800K Budget (RM) Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

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• 2. MSc program for existing workforce. Explore 1:1 matching with companies

from HRDF fund Lead by EEPN supported by HRDF 40 # of heads trained 2,400K Budget (RM)

• 3. Training for strategic I4.0 programs

Lead by EEPN supported by MPC 15 # of heads trained 475K Budget (RM)

• 4. Transformational leadership programs to develop global/regional leaders.

Explore 1:1 matching with companies from HRDF fund Lead by EEPN supported by HRDF 25 # of heads trained 2,000K Budget (RM)

• 5. In-house technicians development for current workforce enhancement

Funded by HRDF via respective companies Lead by respective Companies/Industry Captains 3,000 # of heads trained

• Budget (RM)

10,675K Total Budget for 2019 (RM10,675K)

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Award Ceremony for AMCHAM USAINS HRDF INBASE Program

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Meeting with MOHR and HRDF team

Meeting with Betty Hassan of MOHR and HRDF team on 31st Jan 2019 at Putrajaya Two Action items were proposed:

• 1. EEPN to prepare proposal for National Talent Strategy for E&E Industry

and submit MOHR. Ms. Betty to review and advise on next action plans

• 2. EEPN to prepare proposal to utilize MOHR-MOE RM 14 million on

reskilling budget for existing workforce and yet-to-be employed graduates related to I4.0, for both KS#1 and KS#2

KS#2: Action Item 1 (yet-to-be-employed)

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2018 Status:

• Trained 121 fresh E&E

graduates

• Constrained by HRDF

2019 Plan:

• E&E engineers reduced to 75
• Include 25 Mechanical

engineers

• Still exploring for source of

funding

KS#2: Action Item 2 (MSc for E&E)

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2018 Status:

• Trained 139 engineers for

PostGrad MSc

• Constrained by HRDF

2019 Plan:

• Still exploring for source of

funding

• Explore 1:1 matching ??

KS#2: Action Item 3 (Strategic I4.0 programs)

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2018 Status:

• Initiated procurement process

2019 Plan:

• Appointed USAINS to conduct

“Upskilling Industry 4.0 Practical Training”

• Training starting from March

2019

KS#2: Action Item 4

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• Finalize Source of funding
• Develop Terms of Reference

(TOR) for training by Feb 2019

New Project for 2019

KS#2: Action Item 5 (Inhouse technicians)

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2018 Status:

• Actual trained = 2,062
• Goal was 500
• From 6 MNCs

2019 Plan:

• Continue same approach
• KPI increased to 3,000

technicians

Thank You

MPC TIP @MPC_HQ https://www.facebook.com/MPCHQ @mpc_hq

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MALAYSIA

D R I V I N G P R O D U C T I V I T Y O F T H E N AT I O N

PRODUCTIVITY CORPORATION

KS#3 Update to EEPN GC 2/2019 Meeting Chair: Dr. Thomas Ooi (Manager, Intel Corp) Co-Chair: Vimala Murugan (Director, MITI)

29 EEPN - SULIT

Boardroom, Inari Amertron Berhad, P201| 21st March 2019 | 10:30a.m. ~ 1:00p.m.

KS#3 Work Plan 2019 (revised budget and KPIs)

Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

Accelerate the Adoption of Industry 4.0

Key Strategies Action Items

2019 Measure KPI

• 2. Shortlist and nurture technologies/solutions companies as I4.0 Solution

Providers Lead by EEPN, supported by MITI, MPC, MIDA and MATRADE 6 # of SMEs 150K Budget (RM) Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

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• 1. Identify 2 areas of technologies/solutions as Prioritized Pillars

Lead by EEPN, supported by MITI, MPC, MIDA, SIRIM & MIMOS 2 # of Prioritized Pillars 50K Budget (RM)

• 4. Drive regional I4.0 technology hackathon activities for the identified technology

areas Lead by EEPN, supported by MITI, MPC and Intel 1 # of hackathon event 50K Budget (RM)

• 5. Establish long term regional I4.0 technology expert centre . Aligned with Industry4WRD -

Strategy T3: Research, Innovation, Commercialisation and Entrepreneurship (RICE) program Lead by EEPN, supported by MITI and MIDA

1 Expert centre approved for implementation

• Budget (RM)
• 6. Establish regional conference for I4.0 technology and EEPN related activities

Lead by EEPN, supported by MPC and MITI, co-organized with research universities 1 # of conferences 150K Budget (RM)

• 3. Drive IIoT PLUGFEST activities for I4.0 Adoption. Estimate 2 engineers per

company Lead by EEPN, supported by MPC and Intel 60 # of companies 200K Budget (RM) $600K Total Budget for 2019 (RM)

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KS#3: Action Item 1 and Action Item 2

IOT Sophic HF Tech T.E.M. Smart Solution Big Data

EEPN - SULIT

MDEC to Propose

32 EEPN - SULIT

• March 07 2019 launch by MITI DM YB Dr. Ong
• Venue: MPC, Kepala Batas, Penang

EEPN PLUGFEST Convention 2019

345 participants attended the convention (87 from E&E Sector; 55 from Manufacturing; 78 from Services; 63 from Public sector and 62 from Academic)

6 Proof of Concepts (POCs) showcased

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EEPN PLUGFEST Convention 2019

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EEPN PLUGFEST Convention 2019 6 POCs showcased

Graphic or Picture

Company: ALLIANCE CONTRACT MFG Sdn Bhd Name of project:IIoT implementation at motor test rig

Graphic or Picture

Company: SANMINA-SCI SYSTEMS (M) Sdn Bhd Name of project: IIoT of Label Applicator

Graphic or Picture

Company: K-ONE INDUSTRY SDN BHD Name of project: IIoT implementation at manual assembly line

Graphic or Picture

Company: OSRAM OPTO SEMICONDUCTORS (M) SDN BHD Name of project: IIoT implementation for oven

Graphic or Picture

Company: CPI (P) SDN BHD Name of project: IIoT implementation on manual THERMO HYGROMETER

Graphic or Picture

Company: TF AMD Microelectronics (P) Sdn Bhd Name of project: Oven Thermal Controller Data Integration & Violation Reaction System

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IIoT PLUGFEST 2019 (Overall)

Upcoming IIoT PLUGFEST 2019

• 1. Central – April 2019
• 2. Southern – June 2019
• 3. Northern – July 2019

EEPN PLUGFEST Convention

• March 07 2019 launch by MITI DM YB Ong
• Venue: MPC, Kepala Batas, Penang
• Showcased 6 POCs from 2018 during IIoT PLUGFEST

Program Day 1 – Introduction Day 2 – Hardware configuration Day 3 – Full Configuration + Node Red Proposed Charges

• Explore full HRDF claimable
• MNC – Explore charging them for starter-kits
• SME – FOC
• External Consultants – Paying full amount

Outcome 2018 (Plan) 2018 (Actual) 2019 (Plan) Attendees 60 32 120 Proof of concept 30 17 60 Showcase 8 8 20

EEPN - SULIT

Additional 3 Proof of Concept (as at 19-Mar)

• 1. Inari Technology Sdn Bhd
• 2. Motorola Solutions Malaysia Sdn

Bhd

• 3. Sandisk Storage Malaysia Sdn Bhd

36 EEPN - SULIT

IIoT PLUGFEST 2019 (First Event)

UP NEXT

Best Western Petaling Jaya

Participants : 20-23 SMEs (Max 2 participants per company) Cost Incured : The fee for a participant is RM 2800 for all 3 days. RM 500 surcharge for additional participants from same company (Starter kit to be shared) Total budget required for Central region is RM70,000.

http://www.psdc.org.my/events/2019/iiot-plugfest-2019

37 EEPN - SULIT

IIoT PLUGFEST PM training for SDCs

Objective: To enable state skills development centres nationwide to Program Manage and conduct IIoT workshops e.g PLUGFEST at their own respective regions SDC under FMSDC (13)

Northern: PSDC, KISMEC, PESDC, PHCDC Central: SHRDC, MISDEC Southern: NSSDC, PUSPATRI, East Coast: Pahang Skills, TATI, TESDEC Sabah: SSTC Sarawak: PPKS

38 EEPN - SULIT

Objective: Drive regional I4.0 technology hackathon activities for the identified technology areas

• Explore partnership with CREST (primary) with support from Universities
• Objectives of Hackathon
• Solve problem
• Collaborate in a team to come out with solution
• Present the solution at the end of the hackathon
• Theme / Technology Areas will be
• IOT or
• Big Data
• Next Steps:
• Draft Problem Statement
• 1-day event
• As a supporting event (e.g. 1 day before actual) for MITI Industry 4.0 Summit (Oct 2019)
• CREST’s contact person

Regional Hackathon

39 EEPN - SULIT

Objective: Establish long term regional I4.0 technology expert centre

• 1. Opportunity #1: Regional I4.0 Expert Centre with Elliance
• Batu Kawan, Penang
• Consortium of I4.0 related companies
• Showcasing technologies related to Automation, Robotics, IOT and

Big Data

• 2. Opportunity #2: MDEC’s ADAX
• Bangsar South, focus on Big Data Analytics and AI
• These are aligned with our KS#3 Prioritized Pillars

Regional Expert Centre

40 EEPN - SULIT

Objective: Establish regional conference for I4.0 technology and EEPN related activities

• Leverage MITI Industry 4.0 Summit – Oct/Nov 2019
• 2~3 days Summit
• EEPN to collaborate with MOE (Prof. Dr Arham)
• Execution parties are
• UTM (Prof. Dr. Ali Selamat, School of Engineering)
• USM (Dr Rusni, Dean of School of Computer Science)
• USM (Prof Dr Hooy Chee Wooi, School of Management)

Regional I4.0 Conference

Thank You

MPC TIP @MPC_HQ https://www.facebook.com/MPCHQ @mpc_hq

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MALAYSIA

D R I V I N G P R O D U C T I V I T Y O F T H E N AT I O N

PRODUCTIVITY CORPORATION

KS#4 Update to GC 2/2019 Chair: Mr. KC Lau (Inari) Co-chair: Mr. Zaky Moh (SME Corp)

42 EEPN - SULIT

Boardroom, Inari Amertron Berhad, P201| 21st March 2019 | 10:30a.m. ~ 1:00p.m.

KS#4 Work Plan 2019 (original)

Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

Strengthen SME Development

Key Strategies Action Items

2019 Measure KPI

• 5. Maximize value from E&E Directory, emphasizing SMEs. Link potential

customers and suppliers esp from overseas. Lead by EEPN, MIDA, MATRADE, SME Corp and MPC 100 # of registered users 30K Budget (RM) Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

43

• 2. Nurture selected SMEs in strategic focus areas e.g. test services, automation

& mechanization, vision systems etc Lead by EEPN supported by MPC 10 # of SMEs 200K Budget (RM)

• 3. Develop local SMEs to be Solution Providers for total integration for smart

manufacturing environment and end-to-end supply chain Lead by EEPN 2 # of Solution Providers 100K Budget (RM)

• 4. Competency enhancement program for SME owners.

20 paxs/class X 2 batches Lead by EEPN, supported by MPC 40 # of SME Owners 340K Budget (RM)

• 6. Manufacturing Innovation Center (MIC). To provide guidance to MIC

management to drive for SMEs development Lead by MITI, supported by EEPN

• Establishment
• f MIC
• Budget (RM)
• 1. MNCs/LLCs to identify and develop local SMEs. Additional 10 SMEs for 2019

Lead by EEPN supported by MIDA 10 # of SMEs

• Budget (RM)

670K Total Budget for 2019 (RM)

KS#4 Work Plan 2019 (revised)

Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

Strengthen SME Development

Key Strategies Action Items

2019 Measure KPI

• 5. Maximize value from E&E Directory, emphasizing SMEs. Link potential

customers and suppliers esp from overseas. Lead by EEPN, MIDA, MATRADE, SME Corp and MPC 100 # of registered users 30K Budget (RM) Note: Achievement of KPIs is subjected to availability

• f requested funding for EEPN, and delivery partners

44

• 2. Facilitate a locally designed and developed IIoT Starter Kit to promote I4.0

adoption by SMEs Lead by EEPN supported by MPC Done Starter Kit prototype 200K Budget (RM)

• 3. Convert Inari’s Manufacturing Execution System (MES) into a generic system

package for adoption by other SMEs. aLead by EEPN supported by Inari 1 Availability of generic MES System 20K Budget (RM)

• 4. Developing Stronger SMEs Owners Program to enhance competency, plus

development of training module (One batch of 25 participants) Lead by EEPN, supported by MPC 25 # of SME Owners 228K Budget (RM)

• 6. Manufacturing Innovation Center (MIC). To provide strategic guidance to MIC

management to drive SMEs development Lead by MITI, supported by EEPN

• Establishment
• f MIC
• Budget (RM)
• 1. MNCs/LLCs to identify and develop local SMEs. Additional 10 SMEs for 2019.

Organize workshop to share best practices Lead by EEPN supported by MIDA 10 # of SMEs

• Budget (RM)

RM478K Total Budget for 2019 (RM)

45 EEPN - SULIT

KS#4 Action Item 1 (List of SMEs to develop)

1. Waftech Sdn Bhd 2. QI Sdn. Bhd 3. TT Vision Technologies Sdn Bhd 4. CPI (KL) Sdn. Bhd. (for Junction Box 5. Win-Hall Tech Sdn. Bhd. (Automation) 6. NationGate Sdn. Bhd. 7. Prism Precision Engineering 8. Bloomic Engineering Technology 9. Swift Bridge Technologies

• 10. UWC
• 11. Conquest Electronics Sdn. Bhd.
• 12. Crystal Clear Technology (CCT)
• 13. MDS Advance (Machining)
• 14. Coraza-STS (Metal Frame)
• 15. Camtronics (Wire Harness)

Supporting Companies 1. Firstsolar Malaysia 2. OSRAM Opto 3. Finisar 4. Keysight Technologies 5. Plexus 6. Inari Ametron Bhd.

15 SMEs Identified (2018) Additional 10 SMEs (2019)

In Strategic Focus Areas To be Solution Providers

Grow them (2019)

Can also leverage:

• KS#1 can assist with Design tools
• KS#2 can assist with Talent Development
• MIDA’s assistance re: incentives for specific areas
• f D&D

• Inari has 3 SMEs
• Waftech Sdn Bhd http://www.waf-tech.com/
• QI Sdn. Bhd.
• TT Vision Technologies Sdn Bhd http://www.ttvision-tech.com/
• FirstSolar KHTP has 2 SMEs
• CPI (KL) Sdn. Bhd. (for Junction Box)
• Win-Hall Tech Sdn. Bhd. (Automation) http://www.winhalltech.com/
• Finisar has 1 SME
• NationGate Sdn. Bhd.
• Osram Opto Semiconductors has 3 SMEs
• TT Vision http://www.ttvision-tech.com/
• Prism Precision Engineering http://prismprecision.com/v2/
• Bloomic Engineering Technology http://www.bloomictech.com/
• Keysight Technologies has 4 SMEs
• Swift Bridge Technologies https://www.swiftbridgetechnologies.com/
• UWC http://www.uwcholdings.com/
• Conquest Electronics Sdn. Bhd. http://www.conquestelec.com/
• Crystal Clear Technology (CCT) http://www.cct.com.my/
• Plexus Manufacturing has committed 3 SMEs
• MDS Advance (Machining)
• Coraza-STS (Metal Frame)
• Camtronics (Wire Harness)

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KS#4 SME Development List

STRICKLY CONFIDENTIAL WITHIN EEPN ! We have 16 SMEs identified (from 6 MNCs)

Proposed to Organize a Workshop among flagship companies

Flagship Companies are: – Firstsolar, OSRAM Opto, Finisar, Keysight Technologies, Plexus and Inari Amertron Bhd

• Objectives of workshop: Each flagship company to:

– List of their SMEs under development and their capabilities (segment, back ground, plan and status of their SMEs) – Create business opportunities for these SMEs to other flagship companies – Improve SME’s cost competitiveness

• Localization of raw materials
• Automation of process

– Share each flagship’s SME Business Development Model, and how to measure SME progress (growth phases)

47

Proposed to Organize a Workshop re: SME

• Participating flagship companies (as of 13th March 2019)

– Keysight (Tay Eng Su) – Plexus (ML Au and CL Chuah) – Silterra (Tahir) – Inari (Azidi)

• Organize Phase 1 Workshop among flagship companies

– Date: Tentatively April/May 2019 – Venue: Penang – High level objective is share each flagship’s SME Business Development Model, and how to measure SME progress (growth phases)

• Organize Phase 2 Workshop among SMEs companies

48

Next Steps re: SME Development

Eventually we will link with MIDA’s ‘Domestic Investment and Supply Chain Coordination’ Division

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‘Made in Malaysia’ IIoT Starter Kit

GOAL : To facilitate a locally designed and developed IIoT Starter Kit Background

• EEPN IIoT PLUGFEST has been a success
• 6 POCs were show-cased at PLUGFEST

Convention

• Current Starter Kits are sourced overseas
• We aspire to develop a Made-in-Malaysia

Starter Kit

• The prototype will have more features

than current starter kit e.g. more USB ports etc

• The cost will be ‘cheaper’ or ‘the same’ to

current model

• The prototype must be ready (tested and

commissioned) by Q4 2019

KS#4: Action Item 3

50

GOAL : Convert Inari’s Manufacturing Execution System (MES) into a generic system package for adoption by other SMEs Approach

• Currently, Inari has a Manufacturing

Execution System (MES) to manage their entire manufacturing shopfloor lines

• This MES software is scalable to any SME

which has a ‘process-centric’ manufacturing environment e.g Surface Mount Technology (SMT) or Assemble lines

• We want to make this MES Software

available to other SMEs with certain customization for adoption

• Showcase successful ‘Use Case’ adoption,

with ‘Before’ and ‘After’ improvements

Inari’s MES (Manufacturing Execution System)

(Data Input, Integration & Measurement)

51

Elevating the operations prowess with MES

PREVENTION: Mistake proof processes IMMEDIATE DETECTION: Fast Respond REALTIME PERFORMANCE Accurate & Immediate REMOTE DEVELOPMENT Accessibility & Control

4th LEVEL – Real time feedback to PIC 1) Notification to next level/PIC on current error encounter 2) Shows actual root cause as a result from analysis 3) Perform adequate CA & PA 3rd LEVEL – Block Machine & System Transaction 1) Block machine to proceed when high-risk error detected. 2) Block/Hold Shopfloor transaction of affected Lot 2nd LEVEL - Error Log Code Analysis 1) Real time error code analysis & decoding 2) Identify suspicious/high risk error 3) Log the error code/mc event 1st LEVEL – MES Linkage With Sub Module Of Machine Interface 1) MES linking activities of all machine interfaces 2) Traceability on machine interface movement & error log

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2018 Actual

Successfully organized one training on Developing Stronger SMEs Owners

2019 Plan

• We will organize 1 additional training

targeting 25 participants

• 6 days duration
• Will be in central region on 1st week
• f August until 3rd week of August

Project Paper was Approved during last GC 1/2019 Meeting

Developing Stronger SMEs Owners Program

Developing Stronger SMEs Owners 2019

53

Revised module based on 2018 feedback

• 1. Strategic Change and Business Strategy
• 2. Selecting your Game Changer, be competitive
• 3. Business Acumen of Winning Deals (to

include how to achieve total customers satisfaction)

• 4. HR Management (to include total employee

engagement and performance management)

• 5. Outside the Box Thinking about Digital

Transformation

• 6. Financial Strategies to Support Growth (to

include How to prepare for listing)

Post 2019 Strategy:

• Develop training

package/modules with the current training provider

• Training package/modules to

be owned by MPC

• Eventually, will pass the

training package/modules to a Government related training agency (INTAN etc.) for sustainable proliferation

KS#4: Action Item 5 (E&E Directory)

54

As agreed with MIDA on 12th Feb 2019

Activities Timeline (2019) Populate 400 companies (MIDA’s existing database) End of Feb Finalize Portal (Ver 1.0) End of March Launching of Portal 1st week of April Fine tune portal with new features Apr & May Populating of database from associate agencies e.g. MATRADE, SME Corp etc June Conduct survey of pilot platform & user friendliness End of 2019 Portal (Ver 2.0) 2020 Double check with MIDA on timeline and any screenshots Need to check with Norhizam

KS#4: Action Item 6 (MIC)

55

GOAL : To provide strategic guidance to MIC management to drive for SMEs development

Background

• So far, our EEPN initiatives are mostly ‘tactical’

due to short time frame and limited resources

• We will leverage MIC for provide a strategic

umbrella for overall SME development

MIC

Business Platforms / Market Access Financial & Funding Regulatory and Policies

SME DEVELOPMENT STRATEGY

Incubation & Commercialization Design and Development Kaizan, Quality & Productivity

tactical actions tactical actions tactical actions tactical actions tactical actions

Agenda: GC Meeting 2/2019

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TIME ITEM AGENDA PRESENTER 10:30am ~ 10:40am 1 Opening Remarks. The Chairman 10:40am ~ 12:20nn 2 Brief update by each Key Strategy (25 mins X 4) Respective KS Chairpersons 12:20pm~ 12:35pm 3 Executive summary: “Study on Productivity and Contribution of the Malaysian E&E Industry” (Final Report) UTAR 12:35pm ~ 1:00pm 4 Other matters arising, and next meeting The Chairman

A Study udy on Produ

• ductivi

vity and nd Cont

• ntribut

ution n of the he Malaysian n E&E Indu ndustry

57

21 March 2019

58

1. Objectives of the Study 2. Research Methodology 2.1 Secondary Data Analysis 2.2 Qualitative Study 2.3 Quantitative Study 3. Key Highlights 3.1 Findings from the Study 3.2 Manufacturing and Technology Enhancement 3.3 Areas of Improvement 4. The Contributions of E&E Industry 4.1 Economics Perspectives 4.2 Multiplier Effects 4.3 Contributions of E&E Companies in Malaysia – beyond Manufacturing 5. Recommendations for MIDA Incentive Process 2019 Plan 6. Recommendations 6.1 Short-term Recommendations 6.2 Mid-term Recommendations 6.3 Long-term Recommendations 7. Best Practices MNCs, LLCs & SMEs 8. Summary

• 1. Objectives of the Study

i. To identify the state-of-the-art manufacturing and technology adopted as well as productivity issues faced by selected companies in Malaysia's E&E sub- sectors; ii. To analyze the contribution and the best practices of E&E sub-sectors;

• iii. To recommend some policies to improve E&E industry's productivity and
• iv. To identify some relevant and important statistical data for the E&E industry,

which are yet to be collected and systematically compiled in Malaysia.

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• 2. Research Methodology

2.1 Secondary Data Analysis

• DOSM, OECD, and others
• To determine the Output Multiplier (OM), Domestic Output Multiplier (DOM) by
• sectors. Based on the national Input-Output Tables (IOT) and Leontief inverse matrices

provided by OECD, relevant multipliers were calculated for 36 industries in Malaysia (based on United Nations International Standard Industrial Classification of All Economic Activities Revision 4 [ISIC Rev 4]). The most updated Input-Output Tables that are available is for year 2015.

• One of the advantages of using the OECD IOT is that it allows Cross-Country

Comparison of the multiplier effects in the E&E industry.

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• 2. Research Methodology

2.2 Qualitative Study

• Targeted respondents are management personnel from MNCs, LLCs and SMEs of 8 sub-

sectors from the E&E Industry: Automation, IE, Semiconductor, EMS, Storage, LED, Solar & IoT.

• Face-to-face interview was conducted with the with the firm’s management, held from

the 15th May to 20th June 2018, 16 companies (5 MNCs, 4 LLCs and 7 SMEs) located at Kedah, Penang, Perak, Selangor, and Johor.

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• 2. Research Methodology

2.3 Quantitative Study

• Targeted respondents are management personnel from MNCs, LLCs and SMEs of 8

sub-sectors of E&E Industry: Automation, IE, Semiconductor, EMS, Storage, LED, Solar & IoT.

• The sampling locations are Penang, Kedah, Perak, Kuala Lumpur, Selangor, Negeri

Sembilan, Johor, and Sabah. Nearly 800 companies were approached to participate in the survey. This report is based on the responses from 104 companies across various MNCs, LLCs and SMEs.

• The data collection was conducted from August to December 2018.

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E&E subcategory by MNC, LLC, and SME

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2.3 Quantitative Study

2.3.1 Re Respondents Profil ile

Sub-category MNC LLC SME Total (n) Total (%) Automation 2 15 17 16% Industrial Electronics (IE) 6 3 17 26 25% Semiconductor 10 2 10 22 21% Electronics Manufacturing Services (EMS) 8 5 8 21 20% Storage 1 3 4 4% LED 2 6 8 8% Solar 2 2 4 4% Internet of Things (IoT) 2 2 2% Total (n) 27 14 63 104 100%

2.3 Quantitative Study

2.3.1 Re Respondents Profil ile (cont.)

Figure 2.1: Summary of Respondents Figure 2.2: Distribution of Ownership

64 MNC & LLC 39% SME 61% 15% 5% 29% 51% 19% 10% 62% 10% 17% 8% 49% 26%

Less than 50% Malaysian Ownership 50% to 99% Malaysian Ownership 100% Malaysian Ownership 100% Foreigner Ownership

MNC & LLC SME Total

2.3 Quantitative Study

2.3.1 Re Respondents Profil ile (cont.)

Figure 2.3: Number of Employees Figure 2.4: Annual Sales Turnover

65 5% 5% 15% 76% 8% 60% 17% 13% 2% 5% 38% 13% 13% 31%

Less than 5 persons 5-75 persons 76 – 100 persons 101 – 200 persons More than 200 persons

MNC & LLC SME Total 100% 46% 46% 8% 28% 28% 5% 39%

Not more than RM5 Million RM5.01-RM30 Million RM30.01-RM50 Million More than RM50 Million

MNC & LLC SME Total

2.3 Quantitative Study

2.3.1 Re Respondents Profil ile (cont.)

Figure 2.5: Malaysia Market vs Export Markets

66

17% 5% 27% 2% 49% 29% 8% 48% 5% 11% 24% 7% 39% 4% 26%

Malaysian market (more than 80%) Malaysian market (60 – 80%) Both Malaysian and Export markets Export market (60 – 80%) Export market (more than 80%)

MNC & LLC SME Total

• 3. Key Highlights

3.1 Findings from the Study

67

3.1.1 Emerging Strong Competition from Other Countries

• There is a sign that the E&E industry in other countries is tailing Malaysia closely.
• Thailand, Vietnam and Philippines have emerged as close competitors to Malaysia in the E&E
• industry. Due to lower costs of production, Thailand, Vietnam and Philippine are developing

their potential as an important global manufacturing and assembly hub for E&E in the region.

• Trade Balance: Vietnam (2012: -US$567.6 million; 2017: +US$11.5 billion)
• Trade Balance: Philippine (2010: -US$2.1 billion; 2017: +US$9.5 billion)
• Vietnam is likely to move up the E&E value adding chain over the medium term, creating

increasing competition for Malaysia in lower value added segments of the industry (The Edge Financial Daily, 2017, February 10).

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3.1 Findings from the Study (cont.)

3.1.2 Different Perception on the Productivity Measurement among MNCs, LLCs and SMEs.

• For MNCs, it is mostly productivity and cost-oriented. The utilization of machine and

resources in production is calculated by using both operating elements (equipment, machine, operational efficiency and yield), and secondary elements (production time, unit

• utput and target unit per hour) in addition to labour productivity (man to machine ratio).
• For LLCs, the measurements used are usually cost oriented. The productivity depends on

project complexity, man hours involved and the design of the intellectual property.

• For SMEs, the measurements for productivity are generally based on profitability and cash

flow method.

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3.1 Findings from the Study (cont.)

3.1.3 Most of the MNCs and LLCs are Aligned with Industry 4.0

• The current technology used in the production

processes of MNCs and LLCs are aligned with Industry 4.0. For instance, the automated test system, assembly and test automation, latest surface mount technology, big data analytics and etc.

• For some of the SMEs, their production heavily

relies on human hands where products are assembled by workers instead of robots or

• machines. This is due to staff dislike to try new

things and always use conventional methods. Besides, the repair cost for high-end machines and the staff re-train costs required when a new product or technology is adopted are high.

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Figure 3.3: New Initiatives/Activities or New Developments lately

No; 29% No; 51% No; 42% Yes; 71% Yes; 49% Yes; 58% MNC & LLC SME Total No Yes

3.1 Findings from the Study (cont.)

Figure 3.4: IP Ownership Figure 3.5: IP Filing

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Most of the MNCs and LLCs have produced Intellectual Properties (IPs) and filed their IPs in the US, Japan, Taiwan, Singapore, China, Germany and France. On the contrary, only a handful of SMEs have filed their IPs in Malaysia.

No; 54% No; 75% No; 66% Yes; 46% Yes; 25% Yes; 34% MNC & LLC SME Total No Yes 5% 38% 20% 95% 38% 69% 0% 25% 11% MNC & LLC SME Total Malaysia Overseas Malaysia and Overseas

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3.1.4 Sources for Direct Materials – MNC & LLC from Overseas Suppliers and SME from Local Suppliers

The materials used for production are sourced from local suppliers and import from

• verseas. On average, 57% of the direct materials of MNCs and LLCs are imported

material from overseas - especially MNCs from Solar, EMS, IE and Semiconductor (Figure 3.6).

Figure 3.6: Sources of Direct Materials from Local Suppliers an Imports

Local Suppliers; 43% Local Suppliers; 57% Local Suppliers; 52% Imports; 57% Imports; 43% Imports; 48% MNC & LLC SME Total Local Suppliers Imports

3.1 Findings from the Study (cont.)

3.1.5 MNC/LLC are Leading in Product and Process Innovation

• About 66% of MNCs/LLCs have claimed that they have introduced new/significantly

improved products onto the market for the past 3 years as compared to 63% of SMEs.

• About 63% of MNCs/LLCs have claimed that they have introduced new/significantly

improved process innovations/methods of manufacturing or producing goods for the past 3 years as compared to 59% of SMEs.

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Figure 3.7: Introduced a new or significant products and a new or significant improved methods for the past 3 years

66% 63% 64% 63% 59% 61% MNC & LLC SME Total New or significantly improved goods (exclude the simple resale of new goods and changes of a solely aesthetic nature). New or significantly improved methods of manufacturing or producing goods or services.

3.1 Findings from the Study (cont.)

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• Training for innovative activities and acquisition of new equipment (i.e. physical/software), in-

house R&D are the main innovation activities for MNC/LLC and SME. Figure 3.8: Product Innovation and Development

70% 80% 76% 48% 38% 42% 33% 30% 31% 26% 38% 33% MNC & LLC SME Total Your company by itself Your company together with other companies or institutions Your company by adapting or modifying processes originally developed by other companies or institutions Other companies or institutions

3.1 Findings from the Study (cont.)

3.2 Manufacturing and Technology Enhancement

Electronic industry in Malaysia has moved from labour intensive manufacturing in the 1970s to the current research, design, develop and manufacture with Industry 4.0 elements.

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3.2.1 IoT: Products Business Development & Technology Evolution

• Very fast-pace changing industry
• Requires the knowledge of electronics hardware, software coding, big data analytics

and Artificial Intelligence

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• IoT sensors can be viewed

and controlled remotely through the Internet (computer)

• 2010-2015: Viewing and

controlling of IoT sensors anytime, anywhere through smartphone mobile application and 3G/4G mobile networks

• Big data analytics of huge

volume of data collected from IoT sensors

• Automatic control of IoT

sensors remotely by cloud computing using Artificial Intelligence technology

2005 - 2010 2010 - 2015 2015 - now

OEM’s rapidly installing Surface Mount Technology (SMT) lines and EMS concept became compelling and OEMs began outsourcing PCB assembly (PCBA) in a large scale. Many OEMs sold their assembly plants to EMS aggressively vying for larger market share. A wave

• f consolidation

followed, as the more cash-flush firms were able to swiftly buy-up both existing plants as well as smaller EMS companies. EMS providers in Malaysia have started to move into photonic integrated substrate, integration of semiconductor and photonics, medical equipment assembly, 3D printing, additive manufacturing and advanced complex PCBA Well-connected automation, self-

• ptimization and

predictive manufacturing that is aligned with Industrial 4.0.

3.2 Manufacturing and Technology Enhancement (cont.)

3.2.2 EMS: Business Development & Technology Evolution

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1990s 2000s 2015 - now 2015 - now

3.3 Areas of Improvement

3.3.1 Weak Linkages and Low Value-Added

• Weak linkages and low value-added in the E&E industry in Malaysia. It is important to develop a

competitive and sustainable E&E industry in Malaysia, with the assistance of MNCs and active participation of LLCs and SMEs. (Qualitative survey: Responses from 1 SME and 3 MNC respondents)

• Some of the E&E companies are located in FTZ and LMW areas, which requires them to export

80% of their production. As a result, local suppliers supplies less to their value-added.

• In the long run, there should be policy in strengthening linkages and increase value-added.

3.3.2 Lack of Access to a New Market

• Lack of a matured ecosystem within the semiconductor sector. Our local IC design and

manufacturing companies are required to seek businesses overseas. However, local companies do not have the access or rather lack of access to the global supply chain. (Qualitative survey:

Responses from 2 SME and 2 MNC respondents)

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77

3.3.3 Lack of Funding to Develop a New Product and Invest in R&D

• Most of the SMEs did not invest much in R&D and human capital (such as training and

workshop). Majority of SMEs do not engage frontier research facilities with Malaysian

• universities. This causes SMEs to have low value-added and innovative product, low

labor productivity and inflexibility. (Qualitative survey: Responses from 4 SME and 1 LLC

respondents)

• SME’s have lack of capital to invest in R&D. (Qualitative survey: Responses from 2 SME, 3 LLC

and 3 MNC respondents)

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3.3 Areas of Improvement (cont.)

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3.3.4 Mindset of SMEs

• Some SMEs are not aware of the incentives given by the government since the

information may not reach them. Companies, especially SMEs, have limited ability to fill

• ut complicated forms since there is no clear guidelines provided.
• In addition, some companies are not sure which products can claim incentives (e.g.

most of the SMEs’ product is only a part of the final product from other companies). Besides, writing and submitting the reports to the government after receiving the incentive would be a burden to SMEs since most of their workers are technicians.

(Qualitative survey: Responses from 1 SME and 1 LLC respondents)

• Some SMEs are aware of numerous programs, but they are reluctant to send their staff

for training due to resources constraints and perceive difficulty in retaining trained staff.

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3.3 Areas of Improvement (cont.)

3.3.5 Insufficiently Skilled Engineers

• Some respondents opined that some of the engineers in the current market are not meeting

the expectation of E&E industry (Qualitative survey: Responses from 1 SME and 1 MNC respondents)

• In reality, many MNCs are able to hired experience and qualified engineers. However, some

SMEs cannot afford to pay for it (experience and qualified engineers), and complain about engineers’ competency.

3.3.6 High Production Cost and Import Duty on Raw Materials

• This results in E&E companies (especially SMEs) unable to compete with other countries,

particularly China, even when Malaysian firms has the capability to design. (Qualitative survey:

Responses from 4 SME respondents)

3.3.7 Increased Investments

• n

Infrastructure

(e.g. Broadband and transport networks to speed the movement of people and goods)

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3.3 Areas of Improvement (cont.)

• 4. The Contributions of E&E Industry

4.1 Economics Perspectives

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Indicator

2016 (E&E) RM billion 2017 (E&E) RM billion

Exports

287.7a (36.6% of total exports) 343.0b (36.7% of total exports)

Imports

209.9c (30.0% of total imports) 252.9b (30.2 % of total imports)

Net Exports

77.8 (88.3% of total trade balance) Self-Calculate (77.8/88.15d) 90.1 (91.5% of total trade balance) Self-Calculate (90.1/97.25d)

Value Added at basic price

62.64g 67.75g

Labour Productivity in Manufacturing (RM)

106,647g 110,858g

Labour Productivity in E&E (RM)

132,085g 139,724g

Employment (‘000)

474g 485g Sources: MITI, 2016a & 2017b; MITI bulletin 2017c; MITI 4th Quarter, (2017)d ; MPC, 2018g

• Electrical and electronics is the leading sector in terms of foreign investments and become Malaysia’s

major contributor to employment, output and exports.

4.2 Multiplier Effects

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2015 (2011) Multiplier Electronic Electrical Ratio Rank Ratio Rank Output Multiplier (OM) 3.512 (3.792) 2 (3) 3.222 (3.795) 7 (2) Domestic Output Multiplier (DOM) 1.712 (1.498) 20 (31) 1.566 (1.760) 29 (21) Imported Intermediate (OM – DOM) 1.800 (2.294) 1.656 (2.035) Imports content of exports (as % of exports) 56.4 (67.4) 54.2 (62.7)

Source: OECD Input-Output Tables 2018 Edition (ISIC Rev 4)

4.2 Multiplier Effects (cont.)

82

Multipliers and Key Indicators of the E&E Industry in Malaysia, Vietnam, China and Thailand (2015)

Source: OECD Input-Output Tables 2018 Edition (ISIC Rev 4)

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Indicators Malaysia Vietnam Thailand China Electrical Electronics Electrical Electronics Electrical Electronics Electrical Electronics Output Multiplier (OM) 3.222 3.512 3.663 3.516 3.024 2.822 3.349 3.428 Domestic Output Multiplier (DOM) 1.566 1.712 1.632 1.375 1.474 1.514 2.800 2.477 Value Added at basic price (US$ million) 2,757.6 17,506.6 3,330.6 3,817.1 3,187.8 13,418.4 151,730.0 223,220.9 Imports content of exports, as % of exports 54.2 56.4 59.1 62.5 55.9 47.8 19.0 30.4 Exports (US$ million) 7,917.1 54,972.3 5,842.6 11,888.7 9,323.2 33,389.8 211,025.6 493,044.9 Imports (US$ million) 7,763.1 29,936.6 8,019.2 18,051.0 11,465.1 23,372.6 51,555.9 327,427.1 Net Exports (US$ million) 154.0 25,035.7

• 2,176.6
• 6,162.3
• 2,141.9

10,017.2 159,469.7 165,617.8

4.3 Contributions of E&E Companies in Malaysia – beyond Manufacturing

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Talents

• Funding assistance to employees to further their studies.
• Transfer activities – sending people overseas to learn and transfer skills &

knowledge gained.

• Conferences, seminars and benchmark activities.
• Set up training centers in Malaysia with overseas trainers.
• Workforce transformation (postgraduate degree for engineers – collaborate with

USM; Technicians to Associate Engineers; Operators to Manufacturing Specialists).

Expansion of Responsibilities

• Finance, IT & HR Shared Services, Global Sourcing & Emerging Logistics Hubs, Profit

& Loss (P&L) and Operation Centers.

• Many MNCs made Malaysia as the hub of their operations in the region - Osram

Opto Semiconductors, B. Braun's Global Center of Excellence for Intravenous Access products which comprise of the production and R&D functions, Peugeot's ASEAN manufacturing hub and Honeywell's ASEAN Regional Headquarters (MIDA, 2018).

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Regional and Global Leadership

• Management competencies – exposure, teamwork cohesion and organizational

innovation in influencing organizational performance in Malaysia’s E&E industry.

• More than 99% of local managers are leading MNCs .

Establishment of Information and Technology Development Centres

• Information Technology hub (data centers and networks, software & application

for new technologies).

• Contribute to technology development (for example, Keysight Technological

contribution to automotive – introduce 76–81 Ghz Radar and LIDAR technologies targeting Advanced Driver Assisted System for Automotive Collison Avoidance Application).

Cooperation with Universities

• Infineon is collaborated with UTAR, UniMAP, USM, IIUM, UM, AIMST and KDU

(MIDA, 2017).

• Intel has also collaborated with UiTM, USM, UTM, UTP, UNITEM, MMU, UniMAP,

and UTAR for advisory panels or in curriculum development (MIDA, 2017).

4.3 Contributions of E&E Companies in Malaysia – beyond Manufacturing (cont.)

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Others

• SME Corporation Malaysia’s (SME Corp) capacity building programme to

produce local solid-state lighting (SSL) champions and aims to develop Malaysia’s SSL value chain towards chip and application R&D (Prime Minister’s Department, 2017).

• A shared test and measurement hub was set up in Penang in year 2014, led by

Keysight Technologies and facilitated by NCIA, to develop local test and measurement companies as they seek to grow their research, development and commercialization capabilities (Prime Minister’s Department, 2017).

• As of 2017, MIMOS has established an E&E shared services platform for

advanced analytical services in the semiconductor industry which is currently utilized by over 300 companies (Prime Minister’s Department, 2017).

4.3 Contributions of E&E Companies in Malaysia – beyond Manufacturing (cont.)

• 5. Recommendations for MIDA Incentive Process

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2019 Plan (Recommendations)

• 1. The Government should formulate a Strategic Investment Policy to provide guidance for the

types of investment which are aligned with the strategic directions of the nation;

• 2. The ‘Promoted Investments’ list, under PIA, should be regularly updated and revised to stay

relevant with the global technological and market trends;

• 3. Consider extending the incentive period, from 5 years to 10 years so that NCI is empowered to

make such decisions without going to MoF as long as criteria is met;

• 4. Where there are concerns or uncertainty on meeting criteria/guidelines, it is recommended that

NCI seeks professional/expert opinions to support new applications and those that do not fall under PIA’s ‘promoted investment’;

• 5. NCI must be empowered to make decisions and thus be responsible and accountable, for their

approvals of applications. As such, the recommended tenure of NCI’s membership is minimally 3 years;

• 5. Recommendation for MIDA Incentive Process

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2019 Plan (Recommendations)

• 6. NCI’s Committee should be a person with experience, knowledge on the industry, and able to

provide leadership to effectively support the strategies of the country in both local and FDI investments;

• 7. NCI should explore getting additional representative(s) from MOF’s Fiscal and Economics Division

(FED) so that the economic concerns from the industry can be better appreciated.

• 8. Other IPAs such as Iskandar Johor, Northern Corridor Economic Region and etc. should be

rationalized and consolidated under NCI.

• 9. Feedback from SMEs is that it is not easy to fill out the forms to apply for incentives. It is

suggested that MIDA to continually to review the forms regularly to stay relevant aligned with industry trends. 10.There is a need to form a Federation of E&E industry to provide feedback and advocate to the government the strategies of the industry, and recommendation on the PIA list and its concerns.

6.1.1 Focus on Human Capacity Development

• Training is important for skills formation and the development of core
• competencies. Training is highly emphasized by both MNCs and LLCs in order to

remain competitive;

• However, SMEs’ training is significantly lacking, which might be due to several

factors (e.g. high training costs);

• More emphasis on E&E-related trainings could be offered through several

specialised training centres that are HRDF-claimable, with a higher priority for SMEs personnel to attend trainings;

• Training providers should discuss with selected E&E SMEs to conduct a

comprehensive Training Needs Analysis (TNA) to better cater to their needs;

• The current conferences are more focused on theoretical discussions. Therefore,

conferences emphasizing more on practical is needed to allow E&E organizations to share, demonstrate and discuss on latest manufacturing processes and products as well as quality management topics.

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• 6. Recommendations

6.1 Short Term Recommendations

6.1 Short Term Recommendations (cont.)

6.1.2 To Recruit Foreign Knowledge Workers Who Graduated from Malaysia Higher Education Institutions (especially with postgraduate qualification)

• The E&E industry may consider to hire foreign experienced engineers (especially those

who have studied in Malaysia with postgraduate qualification);

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Non-Malaysian Intake Enrolment Output Public Universities Science, Mathematic & Computer 1,459 5,120 1,094 Engineering, Manufacturing & Construction 1,984 6,457 1,319 Private HEIs With University Status Science, Mathematic & Computer 1,725 10,247 No information Engineering, Manufacturing & Construction 2,438 15,290 No information Level of Studies (General) Intake Enrolment PhD 626 2,414 Master 2,297 8,279 Bachelor 8,998 45,774 Diploma 2,428 37,119 Certificate 2,225 7,179 Total 16,574 100,765 Source: Ministry of Education Malaysia, Higher Education, 2018

Table 6.2: Number of Students' Intake and Enrolment and Output (Non-Malaysian) by Level of Studies in Private HEIs, 2017 Table 6.1: Number of Students' Intake, Enrolment and Output for Science, Mathematics, Computer, and Engineering, Manufacturing & Construction in Public Universities and Private Higher Education Institutions (HEIs), 2017

6.1 Short Term Recommendations (cont.)

6.1.3 To Strengthen Linkages between Universities and Industry

• Continual programme to retrain and upgrade the competency of unemployed

engineering graduate to full the needs of E&E industry;

• Encourage more Work-Based Learning (WBL) programmes in universities. WBL is a

current educational model that provides learners with real-life work experiences where they can make use or merges academic knowledge with practice to increase their employability - In Malaysia, they are 7 universities to offered 2u2i programme;

• It is suggested that the internship programme to be extended from 3-4 months to at

least 6 months. Companies have commented that the duration of the internship is too short for meaningful training to be conducted. A purposively designed internship curriculum is critical to enable students to undergo structured and proper training and

• Industry may work with university to develop industry-related projects for students to

work on, to address critical and real issues encountered by the industry, and to train future workforce.

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6.1.4 To Enhance and Encourage Cooperation, Linkage and Knowledge Sharing among E&E Industry

• Compile the list of E&E companies, inclusive of MNCs, LLCs and SMEs in Malaysia. This list needs

to be classified based on the Malaysia Standard Industrial Classifications 2008. The proposed list needs to be updated at least annually;

• The list will be useful in disseminating the updated information on productivity issues,

technology development, government policies and strategies, conferences, seminars, and workshops to E&E companies, especially SMEs;

• There should be a specified new or existing center or agency (for example, “Technology Center”)

in charge of collecting and compiling the data and information on cutting-edge productivity and innovation management, latest products and manufacturing processes, and best practices, and

• This center and agency will then disseminate the data and information to the entire E&E
• industry. This center and agency can establish programs that focuses on developing customer

insights in emerging markets that provides market information back to domestic manufacturers. Information and market data should be shared within the industry, investors, researchers, academics, and the public sector to improve chances of successful commercialization.

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6.1 Short Term Recommendations (cont.)

6.1.4 Collect or Compile Useful Statistics

• Percentage of the materials from a specific company are sourced from local suppliers;
• Name of New/Significantly improved goods (exclude the simple resale of new goods

and changes of a solely aesthetic nature) for the past one or 3 years;

• Name of the New/Significantly improved methods of manufacturing or producing

goods or services, and

• Percentage of services type activities such as R&D, marketing and sales, and customer

support in manufacturing’s employment.

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6.1 Short Term Recommendations (cont.)

6.2 Mid Term Recommendations

6.2.1 Focus on High Value-Added Activities

• High value-added activities such as designing and developing high-end activities,

particularly at the upstream level needs to be given extra attention;

• Due to huge investment costs needed and lack of expertise, there is limited effort for

local companies to move up the value chain - local companies should be provided with the opportunity to partnering with MNCs for new products development, rather than focusing on their traditional assembling, testing and providing low value-added support services to MNCs (unless it is state-of-the-art), and

• Fund allocation given by the government to support local companies may be
• considered. Incentives may be provided to MNCs to encourage them to shift some
• f their sophisticated operations to Malaysia, in order to ensure proper technology

transfer takes place.

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6.2 Mid Term Recommendations (cont.)

6.2.2 To Grow Local Leaders (LLCs and SMEs) & To Keep the Momentum of MNC, LLC, and SME

• Policies which facilitate technology transfer and collaborations in the form of joint research

and development activities, and to promote comprehensive entrepreneurship education to create students’ interest in entrepreneurship as well as to foster talents and capabilities among students, are of key importance;

• Building conducive institutional framework, especially to rationalize and simplify regulations,

reduce administrative burdens and compliance costs as well as to create more transparent and competitive business environment are essential;

• The momentum of MNC, LLC, and SME need to keep through improving technology

management (to keep the competitiveness of MNC and LLC), improve industrial linkages with local players (to develop SMEs), enhance R&D activities and capacity development, and

• There could be many potential “hidden champions” in the E&E sector in Malaysia, who are

doing incremental rather than radical technology or process (distribution, marketing and sales) rather than products innovation, but unidentified - These “hidden champions” could be nurtured to become local champions to further develop the existing supply chain ecosystem.

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• 6. Recommendation

6.3 Long Term Recommendations

6.3.1 Strengthen Industrial Clusters within the E&E Industry

• The successful establishment of Penang’s semiconductor cluster, with an integrated E&E

ecosystem supported by MNCs;

• The emergence of disruptive technologies and technology advances, there is an urgent need to

adapt to changes to maintain its competitiveness - no longer compete on cost competitive advantage;

• The main challenges currently facing the E&E industry are lack of a breakthrough in innovation,

and lack of supporting industries and linkages within the E&E ecosystem, particularly with SMEs;

• Creation of platforms to promote strong partnership between businesses, public entities and

knowledge institutions, such as the one-stop supply chain hub to be set up by ViTrox, Pentamaster Corp Bhd and Walta Engineering Sdn Bhd, and

• Industry leaders should take the initiative to promote the linkages, because they will also

benefit from a stronger cluster developed . Incentives in the form of tax reduction or subsidies to companies facilitating such industrial linkages and networking, especially with local suppliers and supporting industries, funding to encourage the development of local technologies through R&D, improved supply chain management and technology management capabilities.

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• 7. Best Practices

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Area MNCs Technology

• The current technology and equipment adopted are aligned with Industry 4.0 - state of the art

technology know how (robotic automation, smart torque technology, automated test system), state-

• f-the-art equipment (transportation using robotic, cyber-physical system), Supply Chain Dashboard,

Smart factory with M2M communication, and Big Data analytics. Management

• The management is rich internal and external experience which resulted from a strong leadership.
• Adopting flat and lean structure which allows for cost-efficient in the organization, higher flexibility as

well as clear and direct communication among the knowledgeable and experienced employees.

• The management encourages an open door policy where to ensure higher transparency and trust

with their employees. Productivity

• Homegrown system (E-dashboard / Manufacturing Execution Systems; MES to monitor productivity)

to allow for real-time data collection that enables the management and operators to understand the problem and constraints to address the issue in the production.

• Automation journey will drive significant quality improvement and reduce labour cost.
• Web-based shop floor enables tracking of personnel output and quality, as well as tracking the test

station utilization and downtime.

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• 7. Best Practices (cont.)

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Area LLCs Technology

• LLCs possess the latest automation and software tools in moving towards Industry 4.0

Management

• Some companies possess an R&D team with the right balance of skills and talent which

contribute to success in product improvement and product innovation.

• Management is encouraged and actively attend or participate seminar more often in order

to update their latest knowledge, especially on technology aspect.

• Management continuously updates their knowledge by attending trainings.
• Management started using Microsoft Dynamics AX Enterprise Resource Planning (ERP)

solution, aimed at improving the internal processes and controls for sales, product design, purchasing, inventory management, production and logistics. Productivity

• Embarked on a company-wide 5S & lean program to increase efficiency and reduce

wastages in the production process.

• 7. Best Practices (cont.)

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Area SMEs

Technology

• Customize R&D and product design for the customer.
• Adopting industry standard to enable universal data communication for the usage of data

analytic and unlock data value. Management

• Possess a well-developed ERP system to track on the internal processes and controls for

sales (orders), product design, purchasing orders, inventory management (raw materials, finished product), production and logistics.

• Good mix of the management team with diverse background and expertise in different
• areas. Helps to expose new ideas and perspectives for product design as well as solving

problems under different conditions.

• Reports and technical challenges are daily discussed and shared in a centralized manner, so

that information can be obtained and executed well by each staff. Productivity

• Practice on 5”S” on the workplace manufacturing process to eliminate waste, streamline

production, optimize workplace efficiencies, and improve workplace safety.

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• 8. Summary

i. The E&E industry has huge and significant impact on the Malaysian economy in terms

• f international trade balance, productivity and employment, especially the

contribution by MNCs and LLCs;

• ii. The E&E industry, especially MNCs, has helped the Malaysian government to produce

and train significant number of skilled workers plus local leaders/managers who are equipped with knowledge and can handle high-technology equipment's as well as produce high value-added products;

• iii. Our nation needs them to grow local leaders. To develop the expertise in management

and technical areas, to focus on high value-added activities such as designing and developing high-end activities, and to increase sectoral competitiveness through policies, such as investment policy as well as import and export policy;

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• 8. Summary (cont.)
• iv. To promote strong linkages between industry and universities, and
• v. Country must have a long-term development plan and strategic to enhance the E&E

industry in Malaysia due to huge and significant contribution on the Malaysian economy.

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Agenda: GC Meeting 2/2019

102 EEPN - SULIT

TIME ITEM AGENDA PRESENTER 10:30am ~ 10:40am 1 Opening Remarks. The Chairman 10:40am ~ 12:20nn 2 Brief update by each Key Strategy (25 mins X 4) Respective KS Chairpersons 12:20pm~ 12:35pm 3 Executive summary: “Study on Productivity and Contribution of the Malaysian E&E Industry” (Final Report) UTAR 12:35pm ~ 1:00pm 4 Other matters arising, and next meeting The Chairman

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Month / Agenda January Febr uary March April May June July August Sept emb er October Novem ber Dise mber

EEPN GC Meeti ng 1/2019 16 Jan Matrade

• 2/2019

21 Mac Penang

• 3/2019

14 May MPC

• 4/2019

15 Aug KL

• 5/2019

23 Oct Penang

• Upcoming EEPN GC Meetings in 2019

Thank You

MPC TIP @MPC_HQ https://www.facebook.com/MPCHQ @mpc_hq

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