Electronics R&D and manufacturing returning to Malaysia?

Latest News

• What if two countries declared cyber war on each other?
• Why big IT projects fail…and how to prevent it!
• Electronic component sourcing: evolution and strategies
• Instrumentation for Generation Y

LAST week, the Bosch Group and National Instruments both announced facilities in Penang, Malaysia.   With China’s plans to increase the wages of its workers gradually reducing its status as the manufacturing powerhouse of the world, is Malaysia one of the countries which will take up the mantle?   We are already seeing signs that Malaysia’s existing workforce with experience in electronics and semiconductors is offering great advantages for the country, with both Bosch and NI actively recruiting locally to staff their new facilities.   Additionally, the country’s location in Asia, a growing market for solar power, means it is well-positioned to take advantage of the upcoming boom in photovoltaics.  

Bosch going solar in Malaysia

The Bosch Group is planning a new manufacturing site in the Batu Kawan region in Penang, Malaysia, citing a move to internationalise its photovoltaics business.   The investment will be 520 million euros, and the project is said to be the largest construction in the company’s history.   Commercially, Bosch claims the new manufacturing site will mainly serve Asia’s burgeoning solar energy market, saying the Asian market is set for an average annual growth of 30 percent.   The Malaysian site will also produce components for manufacturing sites in other countries. The facility will cover the entire value-added chain, from silicon crystals and solar cells to the modules which can be installed on roofs or in solar power plants.   Production will start at the plant by the end of 2013, with construction completed in 2014. 2000 staff members will be working at the site, producing solar power plants with a total output of 640 megawatts peak each year. The module production lines will reach an annual capacity of 150 megawatts peak.   According to Bosch, the decision to build a new site in Asia reflects general developments in the global market for photovoltaics. By 2020, total installed output in the region is expected to reach some 130 gigawatts peak.   The company chose Malaysia due to its location in the “sun belt”, which experiences very high levels of solar radiation. The country’s qualified workforce in electronics and semiconductors, as well as its local infrastructure, were also seen to be factors influencing the decision to build there.  

Electronics R&D and manufacturing in Malaysia

National Instruments is a bit farther along in Malaysia, holding a groundbreaking ceremony for its planned R&D and operations facility, again in Penang, Malaysia.   The new NI facility is scheduled to be complete in 2012. It is part of the company’s ongoing plan to expand global operations to support its growth.    The new 314,000 square foot R&D and operations facility will be located on part of the company’s 23 acres of land in Bayan Lepas, which is an industrial area hosting several global high-tech companies.   The facility will have an open floor plan and many environmentally conscious features such as energy efficient lighting, motion-activated light switches and plumbing controls and double-glazed Low-E glass windows to prevent heat gain. 

Approximately 1,500 employees working in manufacturing, product development, R&D, IT and finance will occupy the new site in Penang over the next 10 years. National Instruments is recruiting employees for its Penang operation, including experienced engineers to fill key R&D positions.

This rise in Asia poses serious questions for Australia. Depending on the response of the government and the industry, we may be well-placed to capitalise on that growth, just as we have experienced a boom in the resources sector on the back of China. Equally, we may be left by the wayside.