Currently unable to cope with demand, but expect Malaysian chip makers to improve supply, expert says

By now, you'd have read about the semiconductor shortage crisis engulfing Malaysia and also the global automotive industry. This has been largely driven by our country's surge in Covid-19 cases, which has led to global demand of semiconductors far outstripping supply, according to an industry expert.

However, it's not all doom and gloom. President of the Malaysia Semiconductor Industry Association (MSIA), Wong Siew Hai told Reuters that the semiconductor shortage could start easing by year end as more vaccinated workers in Malaysia return to factories and the government eases restrictions on critical sectors.

Also read: Bosch: Disruption in supply from Malaysia affecting Nio and Tesla

The government has started easing restrictions whereby faciities can operate with 80 percent of their workforce and run at full capacity if all staff are vaccinated.

“Predicting based on data I’m seeing, the situation should improve, but we still cannot fulfil the demand,” said Wong, adding that demand is still robust, and orders had been piling up since the end of 2020.

“The constraints we had in June and early July are now beginning to reduce and more volume is being shipped because we are allowed to operate at a higher percentage level,” Wong continued.

Also read: Global chip shortage could remain until 2022, warns Bosch CEO

In case you didn't know, Malaysia accounts for 13 percent of global chip assembly testing and packaging, and seven percent of the world’s semiconductor trade passes through our country.

Even manufacturers like Tesla and Nio weren't immune to the semiconductor crisis. As a result, production had to be scaled back. This has also fuelled experts to suggest that semiconductor manufacturers should move some production lines from Malaysia to China.

Also read: Failure to contain Covid-19: Chip manufacturers mull exiting Malaysia