SPEECH BY THE CHIEF MINISTER OF PENANG YAB TUAN CHOW KON YEOW
AMCHAM Penang Dialogue 2019
Thursday, 3rd October 2019
E&O Hotel, Penang
Distinguished guests, media friends, ladies & gentlemen
First and foremost, I would like to thank the American Malaysian Chamber of Commerce (AMCHAM) for organizing and inviting me to speak at the AMCHAM Penang Dialogue 2019. I am also pleased to welcome The Honorable Kamala Shirin Lakhdhir, U.S. Ambassador to Malaysia, who is present with us today.
Once again, this specifically organised dialogue by AMCHAM clearly signifies the strong testimony that Penang remains a vital destination of choice for investment for many of the US multinational companies.
This year’s topic, “Global Shifts - Penang’s Resilience”, is very apt as it sets the tone for all stakeholders to exchange ideas and re-evaluate their respective strategies moving forward as the world is at the cusp of many developments. The reconfiguration of global supply chain, the proliferation of disruptive technologies among others would have deep implications on how companies run their businesses and whether existing government policies continue to remain relevant under such times.
From 2009 to the first half of 2019, the FDI from the US companies amounted to RM21 billion, representing 37% of Penang’s total manufacturing FDI receipt. Zooming into the first half of 2019, US companies contributed 73% of Penang’s total FDI. The notable reinvestments included those from Jabil, Plexus and Intel while the key new investments included Micron Technology and Advanced Energy Industries among others.
Without a doubt, the reinvestments from the US companies are evidence of Penang’s strong competitive edge in meeting investors’ stringent requirements in the areas of high skilled talents, robust supply chain, infrastructure and government support. Over the past 2-4 decades, US companies have continued to expand their capacity and operation activities in Penang. This includes business diversification into Research & Development (R&D), Design & Development (D&D) and Global Business Services (GBS).
Thanks to the major contribution from the US companies, in the first half of 2019, Penang recorded RM9.2billion of approved manufacturing investment, out of which, 93% is from the E&E related industry. Penang contributed 35% of Malaysia’s total manufacturing FDI in the first half of 2019, which is the highest among the states and it has already surpassed 2018’s full year FDI of RM3.7 billion.
Through InvestPenang, the state government will continue to focus on attracting high quality investments that emphasizes on cutting-edge technologies and skilled talents. In terms of nurturing Penang as a talent hub, the state through the Penang Future Foundation scholarship programme awards outstanding Malaysians in field of studies that are well demanded by our industries and service sectors. Under InvestPenang’s umbrella as well is the establishment of Penang i4.0 seed fund for high potential technology start-ups with the objective to increase participation in the industry 4.0 revolution and digital economy.
With our relentless effort, I am hopeful that Penang will continue leading Malaysia’s export. Having contributed close to 30% of Malaysia’s total export in 2018 and accounted for 80% of Malaysia’s RM120 billion trade surplus in 2018.
I am also pleased to note that AMCHAM has released its 2018/19 Economic Impact Survey for AMCHAM's E&E companies recently. The findings showed that 37 American companies that participated in the survey recorded RM1.9 billion taxes paid in 2018, signifying the importance of US E&E companies to Malaysia. The survey also showed some impressive figures in terms of US companies’ job creation, knowledge transfer and support for local SMEs in the country.
Ladies and gentlemen,
The proliferation of electronic devices and systems, the growing range of Internet-Of-Things and disruptive technologies increase our dependency on semiconductor chips. According to World Semiconductor Trade Statistics organization, the global semiconductor sales were at 33 billion USD in 1987 and it is estimated to achieve 426 billion USD by 2020. Meanwhile, the research from J.P. Morgan showed that electric vehicles only represented 2% of total global vehicle sales volume in 2015 but it is estimated to reach 30% and 60% in 2025 and 2030, respectively.
Similar upward trend, Fortune Business Insights, an industrial research firm, reported that the global medical devices market valued at 398 billion USD in 2017 and it is expected to reach 602 billion USD by 2025. Technological advancements and the rising demand of innovative therapies to overcome unmet needs in the healthcare sector was cited as one of the factors that supporting the growth of the medical device market.
All these research findings are underpinned by one common driven factor - technology innovations will be the key element that would impact any industries in the long term.
To ensure that we are in tandem with the global transformation, Digital Penang will be established to act as a platform on behalf of the State Government to ensure that the economic enablement through digital technologies is possible, where we will see a future Penang that is underpinned by digitally integrated modern lifestyles. Through close collaborative efforts with the business community and the State’s persistent emphasis on advanced readiness of the manufacturing industry for the digital age, I am optimistic that my Penang2030 vision will be realized. And to have Penang as a role model that inspires the nation in modernizing the country’s manufacturing industry.
Once again, I wish to congratulate AMCHAM for successfully organising today’s dialogue and thank you to all the speakers who have made time to participate in today’s discussion.