Sep 08 2003

Taiwan spreads risks between China and Malaysia

By Lee Min Keong

Kuala Lumpur: Not wanting to put all their investment eggs into the China basket, Taiwan is looking at Malaysia as a strategic production hub for IT products in Southeast Asia, particularly in the areas of digital content and multimedia products.
According to Dr Ferng Ching Lin, chairman of the Institute for Information Industry of Taiwan, his country does not want to over-rely on China as its main manufacturing base.
“The recent SARS crisis has indicated that Malaysia will be an ideal location for Taiwan’s manufacturing base to cater to its overseas markets,” said Ferng at the recent Malaysia-Taiwan IT Trade & Investment seminar in Kuala Lumpur.
Ferng said Malaysia’s economic and political stability provided a good working environment for foreign investors. He added that Malaysia should focus not only on incentives for foreign investors but also provide the facilities to add value to products.
Ferng said Malaysia should also find a niche market to compete effectively with lower-cost producing countries such as China.
“Malaysia should focus on providing a complete end-solution to IT products,” he said.
That Malaysia is once again on the radar screens of Taiwanese IT companies is an encouragement to Malaysian officials who have been worried that IT investments have been flowing away from Malaysia to China.
For example, printed circuit board (PCB) manufacturer Nippon Electric is closing down its facility in Selangor due to poor demand for PCBs, resulting in the loss of 700 jobs. The plant started operations in 1992.
Malaysia still has its selling points, especially when compared to countries with higher production costs.
Motorola decided earlier this year to move its manufacturing facilities to Malaysia from Singapore and Hong Kong, while semiconductor giant Intel has continued investing in its massive operations in Malaysia.