OFFICIAL LAUNCH OF KEMIKON SDN. BHD.
SPEECH BY YAB CHOW KON YEOW, CHIEF MINISTER OF PENANG OFFICIAL LAUNCH OF KEMIKON SDN. BHD.
Thursday, 3rd October 2019
AutoCity, Prai, Penang
A very good morning to everyone.
First and foremost, I would like to thank Kemikon Sdn. Bhd., a contract manufacturer of semiconductor equipment, for inviting me to be part of this auspicious day and to officiate the launch of its production facility.
Penang has more than 50 years of industrial experience and the State is currently housing more than 300 MNCs while the number keeps increasing. Penang has successfully established itself as one of the key E&E hubs in the region, having world class semiconductor companies like Intel, AMD, Agilent and Broadcom, each progressively growing their roots in Penang over the years.
In the first half of 2019, Penang recorded RM9.2billion of approved manufacturing investment, out of which, 93% is from E&E related industry. Encouragingly, Penang contributed 35% of Malaysia’s total manufacturing FDI in the first half of 2019, which is the highest among the states and it had already surpassed 2018’s full year FDI of RM3.7 billion.
Leveraging on Penang as a liveable city as well as our proven track record as a destination of choice for investors, the State Government, through InvestPenang, continuously focuses on attracting strategic investments and putting our resources on companies that specialises in cutting-edge technologies which create high value skilled jobs for our people.
Ladies and gentlemen,
The proliferation of electronic devices and systems, the growing range of Internet-Of-Things, the need for more memory and many other foreseeable structural changes due to the disruptive technologies will increase our dependency on semiconductor chips, and more importantly at a much faster pace than ever before. This megatrend is certainly fast and is even unstoppable. A trade war could cause a hiccup on the global economy in the short- to mid-term but it could never prevent the evolution of technology in the long term.
According to the World Semiconductor Trade Statistics organization (WSTS), the global semiconductor sales were at 33 billion USD in 1987 and it ballooned to 469 billion USD in 2018. Meanwhile, according to IC Insights, a semiconductor research company, the global semiconductor shipment grew from 32 billion units in 1987 to 1,068 billion units in 2018.
Against this backdrop, companies like Intel, Samsung, and TSMC need to continuously increase their production to satisfy the growing demand for chips, even though their investment may be at a slower pace in the near term due to the high uncertainties arising from the trade war. In fact, according to SEMI, while the global semiconductor equipment sales are estimated to drop by 16% in 2019, sales growth is expected to resume next year. Global semiconductor equipment sales are expected to achieve 59 billion USD in 2020, representing a 12% year-on-year growth.
Ladies and gentlemen,
At the local front, the Penang State Government through InvestPenang, is inclined towards further enhancing our E&E cluster value chain by making Penang a location of choice for semiconductor equipment companies. I believe that the vast ecosystem of specialized suppliers in Penang is our added advantage and Kemikon Sdn. Bhd. is definitely one of the good examples.
Specialising in building metal structures, parts and modules for semiconductor equipment manufacturers, Kemikon has a strong client base with 80% of its clientele coming from the US. The company’s strength is its ability to understand and fulfil the very detailed and specific manufacturing methodologies that is critical for the compliance of the industry’s strict requirements. Importantly, Kemikon is modernizing and reinventing the traditional metal fabrication by investing in a state-of-the art factory and production equipment, as well as adopting the Industry 4.0 elements in its operations.
Kemicon’s philosophy in modernising its operations and being an employee centric company, as mentioned by Mr. Marcel Wismer (CEO of Kemikon) earlier, is very much in line with my Penang2030 vision. One of the initiatives that I often emphasize in the Penang2030 vision is the “Advance readiness of manufacturing industry in the digital age”. With this and together with another 15 initiatives, I am hopeful that Penang could achieve the vision of “A Family-Focused Green and Smart State that Inspires the Nation” by 2030.
Last but not least, I wish to congratulate Kemikon Sdn. Bhd. on the opening of this new facility and I look forward to your progressive growth and continuous effort to be a leading contract manufacturer in the high-tech equipment industry in Penang.
Thank you and have a good day.