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Malaysia has closed its doors again, and the global semiconductor market may face turmoil again.

Published :5/14/2021 9:46:19 AM

Click Count:2103

Malaysia reported yesterday that 3,807 people were newly diagnosed with the new crown. Under the pressure of more than 3,000 people diagnosed for multiple days, Malaysian Prime Minister Muhyiddin announced that from May 12 to June 7 the "movement control order" and related issues will be implemented nationwide. Control measures, prohibit interstate and intercounty, and prohibit social gatherings, sports and educational activities in response to the spread of the new crown epidemic.

On March 18 last year, Malaysia was shut down for nearly half a month due to the impact of the epidemic, causing many semiconductor manufacturers to announce that their factories in Malaysia have ceased operations. However, with the emergence of new variants of the virus, Malaysia was once again affected by the epidemic. The Malaysian government initially hoped that as the economy gradually reopened, vaccination could ease the infection, but the surge in the number of infected people, coupled with the slow arrival of vaccines, led the government to implement another round of comprehensive restrictions.

Malaysia, as a global semiconductor manufacturing center, many passive component manufacturers have poured a large amount of production capacity here, especially Taiwan resistor manufacturers and Japanese capacitor manufacturers. Malaysia is where one-third of the world's packaging and testing capacity is located. International manufacturers such as Intel, ASE and Infineon have set up packaging and testing plants here. Taiwan's largest silicon wafer fab Global Crystal also has a 6-inch wafer fab in Malaysia. With another round of closure of the country, the originally not optimistic semiconductor shortage tide may worsen, and the delivery period will be further extended. Coupled with the outbreak of many South Asian epidemics, it will inevitably have a certain degree of impact on the production capacity of related companies, and there will be fluctuations in the packaging and testing, capacitor and resistor markets.


Not only that, due to the further deterioration of the epidemic in India, and the blockade in southern India that caused more than 300,000 people to flee, Malaysia has banned Indian citizens from entering the country. This is bound to seriously affect the manufacturing industry in Penang, Malaysia’s electrical and electronic center. Big companies such as Broadcom, Lam Research and Infineon have all set up factories on the island. Through foreign investment and technicians from India, Penang takes up 80% of the Malaysian aftermarket semiconductor manufacturing market. The economy after the epidemic improved last year. The recovery also mainly came from the island’s electronics industry. Driven by demand for semiconductor shipments, Malaysia’s exports in the first quarter increased by 18.2%.

However, with the previous experience of the blockade, the control order also stipulates that other economic activities can be allowed to continue to operate under the premise of complying with the epidemic prevention measures. However, the lockdown lasted for a month, which undoubtedly caused a great obstacle to normal production activities, both in terms of personnel and working hours. In addition to manufacturing, the closure of Malaysia on the brink of the Strait of Malacca will also have a certain impact on transportation.

Last week, Datuk Seri Wong Siew Hai, President of the Malaysian Semiconductor Industry Association, mentioned that the shortage of stocks cannot be solved overnight, even under the global aggressive capacity investment. He believes that it will take several years for the new production capacity to be put on the market. Before that, everyone can only adapt to the current supply chain status quo. However, he is still optimistic about the growth of the semiconductor industry, otherwise the three giants of TSMC, Intel and Samsung will not invest billions of dollars in capacity expansion.