Amidst persistent geo-political tensions, Malaysia's semiconductor industry stands as a beacon of growth, poised to seize a substantial share of the global market, projected to reach a staggering USD$588 billion with a 13% growth trajectory this year. This robust outlook follows the sector's resilient performance in the previous year, where Malaysia's semiconductor industry saw only a marginal decline of 3% from its 2022 value of RM595 billion, notably outperforming the global industry's 8.2% dip.
Semiconductor industry in Malaysia has shown positive growth and Penang is identified as the Silicon Valley of the East. To support SMEs to remain competitive and navigate through their cashflow gaps, forex risks and capitalise on ESG aspirations, Maybank offers its Trade Financing and solutions under Maybank myimpact SME which provides financing solutions, tools, assessments, and tailored support including certification facilitations.
Opportunities Abound
Within Malaysia's semiconductor landscape, opportunities beckon, particularly in integrated circuit (IC) design, wafer fabrication, advanced packaging, and smart automation. These avenues offer fertile ground for Malaysian SMEs to thrive. Moreover, leveraging trade ties with China presents an additional gateway for local players to integrate into the vast semiconductor supply chain, amplifying their global footprint.
Emergence of Penang as a Powerhouse
Penang, lauded by the World Economic Forum as the next semiconductor powerhouse in the region, attracted a record-breaking USD$12.8 billion in foreign direct investment (FDI) last year, marking the highest influx of investment in seven years.
Despite this acclaim, securing financing remains a hurdle for semiconductor SMEs in Penang, with cash flow disruptions posing challenges to meeting high production demands.
Addressing Financing Challenges
To navigate these challenges, trade financing facilities help businesses engage in trading smoothly and securely in minimising risks of credit, payment delays and currency fluctuations.
Maybank Trade Financing offers SMEs the necessary working capital to maintain liquidity and meet business obligations seamlessly. By facilitating inventory purchases and production continuity, Maybank Trade Financing not only ensures uninterrupted operations but also mitigates the risks of payment delays and currency fluctuations.
Maybank Trade Financing assists SMEs in providing the working capital to fill in cash flow gaps and purchase inventory ensuring zero interruption to stock purchases and production, enabling bulk purchasing for better discounts. It can also help mitigate funds payments minimising payment shortage or delays or non-payments from buyers or suppliers. For international trade, Maybank Trade Financing also provides the international trade financing facilities to hedge the fluctuations of forex risks.
Navigating ESG Regulations
SMEs must heed the evolving landscape of environmental, social, and governance (ESG) regulations especially in the growing prominence of semiconductor industry in Penang. To illustrate, Europe introduced the Carbon Border Adjustment Mechanism (CBAM) which mandates foreign exporters to minimise carbon footprints for carbon-intensive products. The complexity of carbon reporting would require SMEs to assess their ESG readiness ahead of time, in preparation to be in compliance with the regulations.
Maybank's myimpact SME is the solution for Malaysian SMEs to meet these regulations. This one-stop ecosystem offers tailored assessments, certification facilitation, tools and expert guidance including sustainable financing to help businesses meet ESG requirements.
Empowering Growth with Maybank
Maybank stands at the forefront, offering holistic solutions tailored to the unique needs of semiconductor SMEs. From managing cash flow to mitigating forex risks and fostering sustainability, Maybank's suite of services empowers SMEs to thrive in an increasingly competitive landscape.
Take Action Today
Discover how Maybank can empower your semiconductor business to soar to new heights. Explore our trade financing solutions www.maybank2u.com.my/smebizsolutions to unlock the potential of your operations. Begin your sustainability journey with Maybank's myimpact SME platform www.maybank2u.com.my/smehub and pave the way for a sustainable and prosperous future.
Source:
- Malaysia is emerging as a new semiconductor powerhouse - https://www.weforum.org/videos/malaysia-semiconductors/
- MSIA: Local semiconductor sector to pick up in second half of 2024 - https://www.mida.gov.my/mida-news/msia-local-semiconductor-sector-to-pick-up-in-second-half-of-2024/
- What is CBAM and how will it impact your business? - https://www.carbontrust.com/news-and-insights/insights/what-is-cbam-and-how-will-it-impact-your-business
- The EU Carbon Border Adjustment Mechanism (CBAM): Implications for supply chains - https://www.pwc.com/gx/en/services/tax/esg-tax/cbam-supply-chain-imperatives.html
