In the electrifying modern tech world, semiconductors are central to powering everything from your sleek smartphone to futuristic electric cars. The hot commodity remains the subject of trade wars and is a key economic contributor for most major world economies. Malaysia is making waves in this high-stakes game, evolving from a humble manufacturing hub to a trailblazer in semiconductor innovation. We aren’t just playing catch-up; we are setting the pace.

Semiconductor industry in Malaysia – then and now

Our semiconductor story started in the 1970s with a focus on manufacturing and assembly. Back in the day, the country leveraged its cost-effective labour, sand and silica supply, and prime location to lure in multinational giants. Fast forward a few decades, and Malaysia has upped its game, diving headfirst into advanced integrated circuit (IC) design and research and development (R&D). Malaysia now commands nearly seven per cent of the global semiconductor market with exports hitting a whopping MYR593 billion (US$138 billion) in 2022 and expected to reach MYR1.2 trillion (US$280 billion) by 2030. This tech-savvy transformation, fuelled by hefty investments in infrastructure and technology, has kept Malaysia ahead of the curve.  States such as Penang have played a key role in driving innovation and attracting investment in the semiconductor ecosystem, contributing to Malaysia’s growing global presence in this industry.

One of Malaysia’s secret weapons is its location within the ASEAN region, offering seamless access to major markets across Asia and beyond. Add to that a top-notch infrastructure that ensures smooth production and distribution, and you have got a recipe for success. Just recently, Prime Minister Dato’ Seri Anwar Ibrahim announced a MYR25 billion (US$5.8 billion) allocation in fiscal support to operationalise the three-phase National Semiconductor Strategy (NSS) with targeted incentives.

Also Read: Hong Kong’s ConTech set to soar in Southeast Asia

At the same time, the New Industrial Masterplan (NIMP) 2030, unveiled in 2023, shows Malaysia’s commitment to bolstering the nation’s manufacturing sector by 6.5 per cent annually. It is expected to contribute a whopping MYR587.5 billion (US$137 billion) to Malayia’s GDP by 2023. That is some serious commitment to staying ahead in the tech race.

The Prime Minister further affirmed this during his speech at SEMICON SEA KL 2024: “Today, I offer our nation as the most neutral and non-aligned location for semiconductor production to help build a more secure and resilient global semiconductor supply chain.”

Thriving local semiconductor ecosystem

Malaysia’s supply chain is rock-solid, thanks to a strong pool of local equipment makers. Now, an emerging cluster of companies specialising in design, AI, and IC design is making waves with global ambitions. This dynamic ecosystem is not just boosting Malaysia’s competitiveness; it is positioning the country as a future leader in the semiconductor industry.

Via the various Malaysian ministries and agencies, including Malaysia Digital Economy Corporation (MDEC) and Malaysia Digital (MD) status companies such as Infinecs, D3 Innovation, MaiStorage and Oppstar, have been pivotal in this transformation, pushing the envelope and setting new standards.

Infinecs Systems

Infinecs Systems is a fast-rising player in Malaysia’s semiconductor industry, focusing on IC/SoC design, embedded system design, and prototyping. Since its inception in 2016, they have supported Fortune Global 500 companies in developing cutting-edge technologies, including sub-7 nm finFET technology, which powers applications across edge computing, automotive, cloud infrastructure, and communications. Infinecs invests heavily in R&D and provides high-income opportunities for local engineers. “We employ 100 employees, with 88 per cent being local Malaysians. Of these, 70 per cent earn more than MYR5,000 (US$1,167), and 90 per cent of our high-income employees are skilled local workers,” said Kalai Selvan, CEO of Infinecs Systems.

Also Read: Hong Kong I&T startups gear up in Thailand for global growth

D3 Innovation

D3 Innovation prides itself on being an original design and manufacturing (ODM) player, providing solutions for clients looking to create or upgrade their own Internet of Things (IoT)-enabled products in the industrial, medical, and consumer markets. Its IoT technology enhances smart manufacturing (Industry 4.0), optimises supply chain management through real-time tracking, and helps monitor power consumption for Environmental, Social, and Governance (ESG) compliance. KK Tan, Managing Director, supports this by stating, “We optimise supply chains by providing real-time tracking in the storage system, monitoring building power consumption to achieve ESG and more.”

MaiStorage

MaiStorage, a startup wholly owned by Phison Electronics Corporation, is focused on driving innovation in NAND storage technology. The company designs, manufactures, and delivers advanced NAND controller ICs and storage modules, addressing the high demands of data centres, AI, and the automotive industry. With a mission to lead in NAND innovation, MaiStorage has already set its sights on becoming a successful IPO, serving as a model for industry growth and R&D investment in Malaysia. They recognise that AI is the trend but is often misunderstood; hence, “We have introduced a low-cost on-premise AI solution, aiDAPTIV, to break the entry barrier for AI newcomers,” said KK Yap, GM of  MaiStorage.

Also Read: PriyoShop launches Bangladesh’s first MSME credit card with LankaBangla and Mastercard

Emerging innovators in the scene

Numerous other contributors who play equally vital roles also drive the ecosystem’s success. One standout example is Oppstar, a pioneer in the IC design industry. As the first publicly listed Malaysian IC design company, Oppstar benchmarks itself against global IC design service providers, showcasing Malaysia’s growing capabilities and ambitions in the semiconductor space.

Malaysia’s semiconductor industry’s growth is bolstered by the contributions of local and international firms, research institutions, higher education establishments, and government agencies working in tandem. Through various policies and incentives, government agencies, including the NIMP 2030, play a crucial role in fostering an environment conducive to growth and innovation.

A collaborative environment is essential for sustaining Malaysia’s competitiveness in the semiconductor industry. Penang, often called the Silicon Valley of the East, is home to several key players that drive this collaborative spirit.

Here are some key players in Penang’s semiconductor ecosystem:

• MITI (Ministry of International Trade and Industry): This key ministry promotes trade, industry, and investment in Malaysia. 
• MIDA (Malaysia Investment Development Authority): MIDA provides comprehensive support to investors, including project development, incentive applications, and regulatory compliance.
• Invest Penang: A one-stop investment promotion state agency that provides comprehensive information on Penang’s investment opportunities and facilitates business setup.
• Digital Penang: State agency accelerating digital transformation in Penang while supporting the Penang2030 vision of a family-focused, green, and smart state.
• CREST (Collaborative Research in Engineering, Science and Technology): Connects industry, academia, and government to boost collaborative R&D and talent development. 
• NCIA (Northern Corridor Implementation Authority): NCIA drives the socioeconomic development of the Northern Corridor Economic Region (NCER)
• PSDC (Penang Skills Development Centre): Talent development institution in Penang, providing industry-relevant training and upskilling programmes

The way forward

With regional competitors stepping up, Malaysia must stay sharp and agile. The key? Doubling down on R&D, supercharging talent development, and beefing up infrastructure. Forming stronger alliances with global R&D powerhouses and spotlighting emerging Malaysian tech stars will also be crucial.

Also Read: KINTO boosts brand engagement and ROI with Omnichat

Together with MD status companies like Infinecs Systems, D3 Innovation, MaiStorage, Oppstar, and the MD national strategic initiative, MDEC is transforming the country’s digital landscape by leveraging technology and innovation to drive sustainable economic growth.

As Malaysia continues to build on its strengths and expand its influence, it is set to shore up the global semiconductor arena with MDEC providing strategic intervention via MD status incentives & the various MD programmes, including market access programmes to broaden their international reach, grants such as Malaysia Digital Export Grant (MDXG) and the MD Founders Center of Excellence (FOX) programme. The FOX programme is dedicated to cultivating high-potential startups by providing interventions in six key pillars – policy, business expansion, investments, amplification, talent and mentoring.

MDEC offers various programmes for Malaysia Digital status companies. Apply for Malaysia Digital status here.

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This article is sponsored by Malaysia Digital Economy Corporation (MDEC).

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In her last role at Visa, Bhavana Ravindran helped clients implement digital payment solutions for consumers and SMEs. She realised that while consumer payment experiences have improved in recent years, small and medium enterprises (SMEs) are still stuck with outdated financial management tools.

“It wasn’t until I started my first business that I experienced the pain of this finance admin headache,” she tells e27. “My conversations with other founders revealed similar frustrations; many spend over 15 hours a week on various finance operations like payment tracking, bookkeeping, and logging receipts, as well as a lot of pain in year-end compliance reporting and tax filings.”

Existing tools were too complicated and old-fashioned because they were designed by accountants for accountants. Because of this, SMEs had to pay hefty sums to accounting firms to manage their admin stuff.

These insights led Ravindran to tackle this multi-billion dollar underserved market by founding a fintech startup. “Earlybird AI’s vision is to empower SMEs to spend less time on finance admin and more time on their customers,” says the founder and CEO.

Also Read: Earlybird AI secures Antler-led funding to simplify finance admin for SMEs

Ravindran is a serial entrepreneur who has founded two startups in the past- Chicago Booth Tech For Good and Dina. Previously, she spent eight years at Visa and held key roles, including Director (Digital Solutions and Product Co-creations).

Based in Singapore, Earlybird AI aims to make bookkeeping and financial admin tasks of SMEs painless, stress-free, and intuitive while giving real-time visibility into the business. The app also doubles as a CFO, transforming boring, low-value admin tasks into high-value insights, reports, and recommendations.

Essentially, Earlybird transforms routine bookkeeping into high-value insights. “We leverage the power of large language models (LLMS) to translate routine business payment events into automated bookkeeping ledger entries, financial reports, trends and analytics, personalised growth intelligence tailored to business persona profiles and recommendations to trim costs,” adds Ravindran.

The tech team spent months training LLM agents with a proprietary Retrieval Augmented Generation (RAG)-based architecture. “Essentially, every financial report can be deconstructed usng LLMs to tie back to the chart of accounts. By combining this business logic with the power of LLMs, we have a game-changing solution that removes much of the manual hassle in these reporting processes today. We have reached over 99 per cent accuracy in the last eight weeks of alpha testing,” she claims.

Just out of stealth, Earlybird — which won the Asia Startup Network Angels Arena pitch event earlier this month — claims it currently grows beta test users by 30 per cent week over week.

Earlybird mainly caters to solopreneurs and founders of early-stage startups and e-commerce firms. In her view, these personas’ financial reporting, compliance, and tax needs are similar in the early stages of operations, and tools like Earlybird enable them to be productive and deliver automation benefits.

The product is competitively priced compared with globally known solutions like Xero. In addition, Earlybird replaces the need for clients to spend more money on hiring accounting firms to manage admin and bookkeeping tasks.

Also Read: A new insights attitude for SMEs in the era of the ‘insights engine’

The fintech startup recently secured an undisclosed sum in a pre-seed funding round led by Antler with participation from several unnamed strategic angels. The money will help the venture accelerate its go-to-market and minimum-viable product release development and hire top-quality design, engineering, and AI talent.

“Founders build the future of our society, but they are currently overwhelmed by admin-heavy, poorly designed bookkeeping tools and low-value operational tasks,” she says.

“By taking on the multi-billion dollar SME accounting and finance admin industry, we can enable innovation and growth by enabling the founders to focus on what they do best – growing their business. Looking ahead, we will constantly evolve our product roadmap to deliver user-centric solutions executed using the latest AI innovations,” she concludes.

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On the first day of Expand North Star event, part of the GITEX GLOBAL 2024 event in Dubai, SOSV Founder Sean O’Sullivan dubbed climate change as an “urgent existential crisis for humanity” and called for the tech investor community to “make it work” through investments in climate tech.

He pointed out the increasing cases of air turbulence that have led to many injuries and even death, highlighting these incidents as a call to action to fight the impact of climate change.

“Air travels are generally safe, but not in the era of climate change,” he told moderator David Rowan, Founding Editor-in-Chief at WIRED UK.

“These events can make industries such as insurance go bankrupt unless changes are made; governmental and investment policies will flow into these areas to make sure that you have.”

But when it comes to starting climate tech investment, O’Sullivan recommended starting with the lowest hanging fruit first, without disregarding the impact of that investment.

Also Read: The climate change and gender equality connection: How to support underfunded women-owned business

“There are low hanging fruits that area. But there are also really, really long term effects that also need to be made. They need some sort of governmental backing, at least to the point where they are able to scale,” he explained. “Venture capital as an asset class is actually quite small, something like less than one per cent of the financial capital is deployed. Therefore we need to leverage other sources of capital. We are starting to see that happening.”

He further explained how SOSV backed around 70 companies each year. In specific areas such as the Future of Food, the firm has several companies that are already at around US$100 million in revenue, growing at 50 to 100 per cent in various aspects.

But for climate tech companies that are working in the area of deep tech, O’Sullivan warned that they need to go “up and ahead” as 2024 is not a year to fundraise easily.

“There are fewer number of companies getting funded per quarter. So, it is a challenging time, and it is also 80 per cent less capital going into other areas that are not General AI. A lot of those companies are taking away from other computing sectors such as climate tech; we see less capital development,” O’Sullivan said.

Considering that many climate tech projects can only see results in the long run, O’Sullivan stressed the importance for investors to “realign” their expectations.

“You are going to be looking at a 15 per cent annual profit or 20 per cent annual profit versus, if you are holding onto it for 10 to 12 years, you can be looking at 25 per cent instead. So, if you are looking a little longer, you can actually make even better profits.”

Also Read: Burning urgency: Why businesses must mobilise against forest fires and climate change

Another point that O’Sullivan stressed was the importance of reimagining different ways to produce the goods that we need today which he saw as where the low-hanging fruit is when it comes to climate tech investment.

“When you look at how long it takes to make a change, it took seven years to get just a million people to use street maps [that I created with my previous company]. But then, we looked at the iPhones and everything else that came out that enabled us to get into more places just another 13 years after that. Suddenly a billion people use it. So, we are already going to start this journey,” he said.

“We are already solving many parts of this challenge.”

Supporting climate tech investments through green bonds

At a separate panel discussion, Elvina Garayeva, Debt Director EECA Region at Incofin Investment Management, confirmed the increasing popularity of green bonds as one of the means to support climate tech projects, apart from venture capital funding.

“The statistics might vary, but we can certainly say that we have witnessed huge spikes in ESG funds and climate funds in particular, over the past years,” she stressed.

Also Read: Need of the hour: How agritech platforms can protect farmers from climate change

Climate bonds were initially promoted and advanced primarily by international development institutions, governments, and municipalities, often to fund large-scale infrastructure projects. Over time, the private sector became involved as well, recognising the opportunity presented by the growing investor awareness of climate change.

Today, climate bonds are in high demand as they align with the priorities of investors who increasingly seek sustainable and environmentally responsible investments.

“They want their money to be invested in something good for climate, for the people. So, the requirement comes from large and electronic investors such as pension funds or insurance companies. It also led to the fact that the markets started to structure this type of products more and more,” she stressed.

According to Garayeva, another important factors include regulatory push such as the recent COP28.

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OneCFO, an AI-powered financial management service platform in the Philippines, has raised US$500,000 in pre-seed funding from undisclosed angel investors.

The investment will be used to develop its suite of B2B financial management apps and hire people.

Also Read: AI will transform customer service, risk management in financial services: finbots.ai CEO

The startup has also appointed Joel L. Tan-Torres (JLT), former Chairman of the Philippine Board of Accountancy (BOA) and former Commissioner of the Bureau of Internal Revenue (BIR), to its Board of Directors.

OneCFO aims to provide CFO technology and expertise to small and medium enterprises (SMEs), startups, and scaleups in the Philippines. It has integrated cloud accounting systems, ERPs, payroll software, business intelligence, and other software into one platform.

Launched in 2022, the platform automates routine tasks and offers real-time finance insights that enable businesses to make data-driven decisions. It empowers accountants to shift from transactional roles to strategic advisors, helping businesses navigate complex financial landscapes.

In less than two years of operations, OneCFO claims to have served around 80 client engagements, processed millions of transactions and helped a dozen SMEs and startups get funded.

Its notable clients include SolX, NextPay, Kwik.insure, Toki, Advance, Colourette, OneLot, LabLog, JLabs, and AIQUE Innovation.

Also Read: Jack is here to help ease corporate financial management

It also partnered with local accounting-tech and niche ERP systems, such as Beppo, Britana, Stash PH, startup accelerators, VC firms, banks, and non-bank financial institutions.

“Bootstrapped in the beginning, we started everything manually – doing things that don’t scale which gave us tons of learnings and best understanding of the pain points of both SME owners and their accountants in this country. We’ve been profitable since our sixth month of operations and been reinvesting our profits to develop the platform. This pre-seed funding will definitely speed-up our development”, said OneCFO’s founder and CEO Jay Olos.

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It’s been ten years since Japan implemented its mandatory Stress Check system in a bid to tackle the longstanding public health crisis tied to overwork and karoshi — a term meaning death by overwork. Introduced in 2015, the initiative was aimed at identifying high levels of stress among employees, requiring companies to survey their workforce on mental health annually.

Yet, despite these efforts, recent data reveals a disturbing trend: work-related mental health issues, particularly among younger workers, are getting worse.

According to surveys, employees under 30 are reporting increased levels of anxiety, depression, and burnout. Experts say that these numbers might only scratch the surface, as they don’t account for the many workers who refrain from disclosing their struggles due to the persistent stigma around mental health issues in the workplace. This hesitation is particularly pronounced in traditional corporate cultures, where workers often fear that admitting mental health challenges might lead to career repercussions or be seen as a sign of weakness.

NTT-AT Partners with Kintsugi for a Data-Driven Mental Health Solution

In response to this deepening crisis, NTT Advanced Technology (NTT-AT), the division of Japan’s leading telecommunications company NTT, has formed an innovative partnership with US-based mental wellness startup Kintsugi. This collaboration aims to shift how companies in Japan approach mental health, leveraging artificial intelligence (AI) to more accurately assess the psychological well-being of employees.

Kintsugi’s AI-driven solution, unlike the traditional Stress Check surveys that rely on self-reported data, analyses short voice clips in real-time to screen for signs of anxiety and depression. This advanced technology uses vocal biomarkers to detect subtle changes in speech patterns that may indicate mental distress. By offering an objective, data-driven method, Kintsugi enables NTT-AT to identify employees at risk of mental health challenges more effectively, without relying on potentially biased or incomplete questionnaire responses.

Toward a more personalised approach to mental wellness

“Stress Check questionnaires are often filled out in haste or even skipped altogether. Some employees might not feel comfortable being fully honest about their mental state,” said an NTT-AT spokesperson. “With Kintsugi’s technology, we can eliminate that subjectivity and focus on providing personalised support to each individual based on their unique mental health needs.”

Also Read: 5 ways leaders can use the power of allowing to manage stress and enhance focus

This partnership could mark a significant turning point in how Japanese companies manage workplace stress and mental wellness. While the Stress Check mandate was a necessary first step, the collaboration between NTT-AT and Kintsugi acknowledges that a one-size-fits-all approach is no longer sufficient for the complexities of today’s workplace mental health landscape.

A new era of mental health awareness in Japan’s corporate sector?

As Kintsugi continues to expand its AI capabilities, companies in Japan may begin to see a more nuanced understanding of their employees’ mental health. With mental wellness becoming an increasingly crucial part of workplace culture globally, initiatives like this could pave the way for more data-driven, individualised approaches that not only improve employee well-being but also enhance productivity and organisational morale.

However, the challenge remains: will the adoption of such advanced technologies be enough to break the stigma surrounding mental health in Japan’s corporate sector? While tools like Kintsugi can provide a clearer picture of an employee’s well-being, it’s up to companies to foster an environment where addressing mental health is not just encouraged but fully supported.

As Japan reflects on the past decade of mandatory stress checks, it’s clear that addressing workplace mental health is an ongoing journey—one that requires continuous innovation, cultural shifts, and most importantly, empathy.

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