Meet 2 companies keeping Malaysia on the world map as a leading semiconductor hub

[This is a sponsored article with MDEC.]

Did you know that Malaysia is consistently placed among the top 10 leading countries in semiconductor manufacturing? In 2023 alone, approximately 35.23 billion semiconductors were produced here.

Malaysia’s semiconductor industry is projected to continue its growth trajectory, with a compound annual growth rate (CAGR) of 7%. According to a report by Eastspring Investments and PwC Singapore, this growth is expected to propel the industry to reach an output of US$46 billion or RM212.52 billion by 2028.

More than 50 years since the first Free Trade Zone in 1972, the semiconductors sector still remains an electrified industry in Malaysia.This has put Malaysia on the global map as an electrical and electronics (E&E) and semiconductor industry powerhouse—which convinced Tesla to set up shop here.

As reported by Forbes Asia in its 200 Best Under a Billion 2023, demand for semiconductors has skyrocketed in the past three years, accelerated by the adoption of AI.

In collaboration with MDEC, we had the opportunity to interview two notable founders in the industry, Dato’ Seri Tan Eng Kee, Chief Executive Officer of Greatech Technology Berhad, and Chuah Choon Bin, Executive Chairman of Pentamaster Corporation Berhad.

They shed light on the roles their respective companies have played in contributing to our current standing, and where they see the sector growing from here.

Greatech Technology Berhad (Greatech)

Greatech has been part of multiple Forbes Asia’s Best Under a Billion lists, recording US$116.2 million in revenue in 2022, with that figure rising to US$140.2 million in 2023.

The company’s products range from single automated equipment (SAE) to production line systems (PLS), which can be customised to the requirements of customers.

Did you know: An SAE is used in semiconductor manufacturing to perform one specific function precisely, such as ensuring accuracy and consistency in the production process.

Meanwhile, a PLS contains both hardware and software. It receives commands from either an automated system or a human operator and then sends those commands to its actuators, which make things happen.

Greatech’s history dates back to 1997 in Bayan Lepas, Penang, with Dato’ Seri EK Tan’s vision of manufacturing semi-automated and automated equipment for the consumer electronics sector. More specifically, hard disk drives.

It was timely, as there were several government initiatives to foster the company’s growth. These included various tax incentives, grants, and streamlined regulatory processes to support both domestic and foreign direct investments in the country.

Malaysia’s local workforce also posed an opportunity, with its people able to offer different skills to the evolving business landscape.

Dato’ Seri EK Tan told Vulcan Post that Greatech today stands tall with a workforce of 1,500 employees, 97% of which are Malaysian. “Driving innovation forward are the 600 design engineers who continuously push the boundaries of what’s possible,” he acknowledged.

Dato’ Seri EK Tan proudly expressed that his company’s stronghold is its continuous tech innovation.

“We invest heavily in research and development (R&D) to stay ahead of the curve, consistently introducing cutting-edge solutions and advancements in factory automation,” he stated. 

Not only does Greatech manufacture these solutions, but its factory’s equipment also utilises Internet of Things (IoT) devices to gather data and improve product functionality and efficiency. Additionally, the team integrates AI and machine learning algorithms to optimise their manufacturing operations.

Founder insights

Pentamaster Corporation Berhad (Pentamaster)

Pentamaster ranked fifth in the Forbes Asia’s Best Under A Billion 2020 list, recording US$118 million in sales, US$20 million in net income, and a market value of US$629 million.

In 1991, Chuah Choon Bin founded Pentamaster in Penang after leaving Intel, where he worked as an automation engineer alongside his brother-in-law. 

“At that time, we saw great opportunity and potential in the automation sector with the mushrooming of manufacturing companies in Penang,” Chuah told Vulcan Post. 

“Most of the manufacturing equipment or factory automation solutions were imported, hence there were growing needs for local automation solutions that were more cost-saving during that time.”

Pentamaster greatly benefited from the developing manufacturing scene in the 1990s, and the supportive regulatory environment for industrial automation.

In fact, Chuah cited the 1997 financial crisis as a turning point during Pentamaster’s early days due to the increased demand for automation that could better save company costs.

Since then, Pentamaster has continued to grow, diversifying its business portfolio not only in the automation manufacturing industry but also in the dynamic and ever-evolving Malaysian market.

Currently, Pentamaster has a few main business portfolios, namely automated test equipment, factory automation solutions, and medical device automation technology. 

Pentamaster continuously invests in R&D to innovate automation solutions. “It’s essential to maintain a mindset of continuous improvement, always seeking to push beyond current boundaries, and embracing the challenges inherent in innovation,” Chuah believes.

Founder insights

I firmly believe that cultivating a determined mindset is essential for success in the entrepreneurial journey, a principle that applies to all entrepreneurs. When you establish a clear vision of your goals, coupled with unwavering dedication and perseverance, you pave the way for significant breakthroughs. 

As an entrepreneur, envisioning the future of your startup is paramount. Beyond its inception, assembling a solid core team becomes crucial for sustaining and propelling growth to new heights. Your core team serves as the cornerstone for achieving substantial expansion.

Growing in the automation era

With companies worldwide shifting to adopt automation for enhanced efficiency and cost optimisation, both Greatech and Pentamaster appear well-positioned to capitalise on this trend.

This is backed by Prime Minister Datuk Seri Anwar Ibrahim’s visit to Greatech’s Penang factory in February 2024. 

There, they highlighted that Greatech produced important machines to manufacture high-tech products such as electric vehicle (EV) batteries, solar panels, and AI boards for top global tech companies.

Ultimately, Dato’ Seri EK Tan stated that Malaysia’s strong foothold in the E&E industry provides a valuable foundation for the automation sector, which Chuah acknowledged too.

Greatech and Pentamaster are just two examples of companies under MDEC’s Digital Exports Division (DEX), supporting and enabling companies to expand deeper into regional and global markets. 

DEX is part of the GAIN (Gateway, Amplification, Investment, and Nurture) programme, which aims to enhance trade opportunities for local tech companies on a global scale.

MDEC facilitates this by collaborating extensively with the Malaysia External Trade Development Corporation (MATRADE) and the Ministry of Foreign Affairs via the Malaysian embassies, which you can read about here.

One example of such networking programmes can be seen through the upcoming SEMICON Southeast Asia (SEMICON SEA), happening at MITEC, Kuala Lumpur on May 28-30, 2024.

The exhibition is where decision-makers in the E&E industry will be connected to share about and demonstrate their tech advancements around Southeast Asia. 

This is crucial for the nation, as global companies serve as the backbone of a vibrant economy, catalysing innovation, generating employment, and nurturing talent to grow Malaysia’s business ecosystem. 

Featured Image Credit: Malaysia Digital Economy Corporation (MDEC) hosted a luncheon attended by the Minister of Digital, YB Tuan Gobind Singh Deo alongside MDEC Digital Export’s GAIN (Gateway, Amplification, Investment and Nurture) programme portfolio companies