SEMICON SEA 2017: Chief Executive Luncheon

Speech by Chief Minister of Penang

April 26, 2017
Olive Tree Hotel, Penang

Ladies and gentlemen

Good afternoon. On behalf of the Penang State Government, I thank investPenang for organizing this networking luncheon as a platform for potential collaborations between the global industry leaders who are attending the SEMICON South East Asia 2017 and our home-grown industry leaders.

Yesterday, in my speech at the SEMICON South East Asia 2017 opening, I touched on smart manufacturing or smart factories and Industry 4.0, and the urgent need for Penang to partake in this Industrial revolution to sustain growth in the semiconductor and electrical and electronics (E&E) sectors. I wish to discuss and provide updates on Penang’s economic and investment climate, investment value propositions and our initiatives moving forward.

Penang’s attractiveness as investment location of choice is evidenced by RM39.7 billion FDIs and RM19.5 billion domestic investment, which amounted to a total investment of RM59.2 billion (USD17.3 billion) from 2008 to 2016. This is a 73% increase from the total investment of RM34.2 billion recorded for a similar 9 year period from 1999 – 2007.

With more than 40 years of industrialization, Penang is well integrated in the global supply chain. We have a vibrant and established ecosystem with over 300 multinational corporations and 3,000 highly competent local suppliers to support the growth of the industry. Our industrial parks have proven to match international benchmarks and a key platform for MNCs to not only synergize their operations, the skills and innovations of SMEs in Penang but matched with the unmatched human talent in Penang, ensure a profitable return.

In this light, we recognize the importance of the local SMEs in spurring the growth of Penang’s industry, and the spillover benefits from large corporations (foreign or local). SMEs are equally important as they provide the much sought after ancillary and support services to the MNCs. Today, the availability of supply chain or ancillary and support services is an important determining factor for FDIs in selecting the location for their investments. The State has a 3-prong approach to SME development i.e.

(i) Establishing SME Market Advisory, Resource and Training (SMART) Centre, which many Penang SMEs today have access to its services and facilities;

(ii) Construction of Penang SME Centre to incubate local start-ups and provide space for SMEs that cannot not afford to have their own facility;

(iii) Developing SME villages to provide ready-built factories and small industrial land plots within the industrial park.

The SME Villages in our industrial parks is to further encourage the growth of our local SMEs and move up the value chain. In February this year, the RM 63 million Penang Automation Cluster was formed, and is expected to be a one-stop supply chain hub for SMEs to further enhance the existing ecosystem in industries and services in the State, supporting multinational companies (MNCs) and local large companies (LLCs).

Over the last decades, with an increasing professionally mature and confident workforce, many companies in Penang have shifted gears from assembly operations to cutting edge technology with intellectual property development, and provision of Global Business Services (GBS). Some good examples of these MNCs are AMD, Intel, Motorola, Dell, B Braun and Osram. Two months ago, Luxoft, listed on the NYSE, and one of the best IT/automotive software companies in the world, set up their COE in Penang. Overall, the GBS sector has created more than 8,000 high-income knowledge-based jobs and the numbers is in growth gear.

We need to expand the pool of human talent and invest in data, the new oil of the 21st century. Towards this end we have taken several initiatives to establish Penang as a Centre of Excellence for science and technology, such as the RM 28 million Penang Tech Dome, RM 20 million Penang Science Café, RM 6 million Karpal Singh Learning Centre, the annual international Science Fair and the RM 3 million Penang Digital Library.

In summary, Penang, is an intelligent, international city, filled with creativity and innovation where talent, technology and tolerance of new ideas prevail. Voted as the most livable city in Malaysia by ECA International, Penang is committed to make Penang as the home for local and global talents. We offer the combination of urban and sea/hill resort lifestyle with fully developed technology parks, excellent network and connectivity, heritage city living, world-class recreational facilities, internationally accredited health care services and most importantly a transparent, efficient and effective pro-business State Government.

Thank you.

Cetak