The Business Year

As local and international firms alike get to know the market, Malaysia is rapidly becoming a hub for semiconductors and other high-tech manufacturing across the region.

Henk Jan Jonge Poerink

Senior Vice President of Global Operations, Besi & Managing Director, Besi APac

Besi came to Malaysia in the 1980s because its two important customers, Infineon and STMicroelectronics, were located here and required spare parts. As such, we established a spare parts hub to serve their needs, after which operations gradually evolved. In 2000, we started building modules, and in 2010 our Malaysia site started building machines. Another important milestone was the direct shipment of all machines from Malaysia, with full ownership of product quality. When it came to our decision to set up a manufacturing base in Malaysia, several factors were at play. In addition to the proximity to our customers, Malaysia offered various advantages that enticed us to establish and enhance local activities. The infrastructure, and in particular Kuala Lumpur International Airport and Port Klang, were also huge draws. Moreover, English proficiency was high, while cost-wise the proposition was more attractive than Singapore. With Infineon, STMicroelectronics, and Intel, we have three big customers in Malaysia, although the total size of the semiconductor market in the country is limited. Therefore, the relevance of our base in Malaysia to a large extent lies in serving regional demand, which includes Singapore, Vietnam, and China, among others. Malaysia is highly competitive for manufacturing, with an excellent value ratio of labor cost to labor productivity. This makes it an attractive base for Besi to operate from. Other important advantages are uninterrupted electricity supply, clean water, excellent infrastructure, and our solid relationship with the government through the Malaysian Investment Development Authority (MIDA) and Royal Malaysian Customs. When it comes to Industry 4.0, from a customer point of view, all our machines are ready. Once they are installed in our customers’ plants, they can perform according to any desired standards. At our production facility we have a different setup, and manufacturing and assembly are still mainly done manually. In terms of our warehousing, however, we are working toward full process automation. In the end, Industry 4.0 is essentially about improvement of productivity and traceability.

Bernd Kirchhöfer

Managing Director, VAT Malaysia

VAT is a global technology leader and supplier of high-end vacuum valves. These are mission-critical components in the semiconductor industry, research and science, and in advanced manufacturing processes for innovative products such as portable devices, flat screen displays, and solar panels. We develop our products in close cooperation with leading equipment suppliers worldwide. With manufacturing sites in Haag (Switzerland) and Penang (Malaysia) and subsidiaries in the US, Asia, and Europe, we are present wherever our clients are. Fifty years of experience in the vacuum industry and over 1,400 highly-qualified employees guarantee that clients benefit from outstanding products and related value-added service. We got our start in Malaysia with a groundbreaking ceremony in February 2012. Nine months later, we completed our 6,000sqm facility and began manufacturing vacuum and transfer valves in April 2013. The opening of our Malaysia factory was significant as it was VAT’s first such factory outside of Switzerland. In October 2017 we added an additional 18,000sqm with a 5,630sqm ISO 6 and ISO 8 cleanroom assembly area and a 4,300sqm flexible manufacturing system with integrated CNC machining area. The main reasons why we chose Penang to build our factory were the great infrastructure and the presence of other industrial players, including, among others, the aerospace and hard-disk manufacturing sectors. There are a lot of machining houses in Penang, along with the local supply chain and logistics. In addition, Malaysia is a safe country with excellent infrastructure, medical services, and international schools. This allows expat workers from our headquarters to have a comfortable life. We appreciate the role that MIDA and Invest-Penang have played, both before and after we chose Penang as our new manufacturing center. Finally, there is also a good supply base, especially with what we are looking for. The hard disk manufacturing industry has been doing business here for a long time, and international machining companies have long provided an excellent base.

Chu Jenn Weng

CEO, Chu Jenn Weng

The idea behind ViTrox was established at my home-based workspace in 1998. The company has since grown to get listed on Bursa Malaysia and has a current market cap of over USD800 million. We have been evolving, but our vision has remained unchanged, focusing primarily on providing world-class inspection solutions that help companies find defects in their processes and eliminate them. We continue to provide world-class innovative machine vision solutions together with our strategic partners. We have been transforming from a fairly simple software company to a total machine solution provider, serving 400 customers in 22 countries. In 2018, we achieved the highest revenue and profits in the history of the company. Since 2015, we have been recording consecutive quarterly growth, and our top line in 2018 stood at MYR395 million (USD95 million). In my opinion, we have continued to run our business as a start-up because there still is such huge potential for growth in this area. We have become a global company able to export almost 75% of its products, and we are the number one in providing 3D X-Ray inspection equipment for the manufacturing industry. Our products are ranked among the best in the world. When we started the company almost two decades ago, few people foresaw that machine vision would become so important for Industry 4.0. 20 years ago, cellphones did not even have cameras. That opens an opportunity for us as a machine vision provider because we can add intelligence to every camera. Whatever happens, cameras will be part of the equation. We are committed to investing in our newly established campus 2.0 to be able to seize this revolutionary change in technology. Not to mention that we already offer some Industry 4.0 products and services to the market, starting with the request of some of our customers to connect our machines to the cloud to allow data analysis. We also have a platform that is able to collect important data from machines and perform visualization and analysis. Based on the result, the user then can take action to improve the machine’s condition to achieve the most optimized output, a tool we offer to local SMEs at a minimal cost.

H'ng Chuan Keat

Operations Manager, Penang Automation Cluster (PAC)

PAC is a joint venture between ViTrox, Pentamaster Technology, and Walta Engineering, three large local companies (LLC) incorporated in June 2016. The vision behind PAC was to establish a hub for advanced, innovative, and cost-effective precision engineering solutions for metal fabrication parts with superior quality and delivery. Our three main objectives are to build and manage the local supply chain ecosystem to support LLCs and MNCs with sheet metal fabrication, tooling, machining and metal finishing services; support and fund cluster development; and develop and elevate local SME capabilities to the point where they are best-in-class smart SMEs with world-class standards. PAC’s principal activities are providing technological design and development, value-added engineering development, metrology shared services, 3D-prototyping, smart manufacturing systems, and technical training for automation cluster companies. Taken together, we are a precision engineering cluster that manufactures parts supporting the automation industry for LLCs. Moving forward, we want to support LLCs and MNCs in the semiconductor, electrical and electronic, medical devices, aerospace, and other high- growth industries. When it comes to our unique strengths, PAC is a one-stop supply chain cluster for sheet metal fabrication, machining, tooling, metal finishing, and outgoing QA set-up by three LLCs. It is the first of its kind in Malaysia. PAC is a smart SME cluster with digital technologies of PACPortal and V-One systems to track, monitor, and analyze the big data of business transactions and machine performance. We are formed by a real business partnership between the JV companies and SMEs through PAC clusters in which PAC provides the training, guidance, and continuous education to enhance SMEs’ productivity, quality, and performance delivery. We also collaborate with PSDC to provide GDVT training to the cluster machinists. As for our expansion plans, there are five acres of land next to the current PAC site reserved by the Penang Development Corporation (PDC) for the second phase of the project. This will encompass the elevation of SMEs involved in the development of Industry 4.0, the IoT, and electronic-related businesses.



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