Professor Ong Kian Ming, who is also a board member of the Malaysian Investment Development Authority, said the Johor-Singapore Special Economic Zone could also replicate the success of China's Greater Bay Area. The area encompassing Hong Kong, Macau and nine cities in Guangdong is also known as the “World’s Factory” and home to more than 50,000 manufacturers. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (May 29): Malaysia should explore the possibility of setting up a joint investment fund to develop a new semiconductor hub in the Johor-Singapore Special Economic Zone, said Professor Ong Kian Ming.

The proposed fund could strengthen Malaysia’s position in the industry at a time when competition to attract investments into the sector is intense, said Ong, who is also a board member of the Malaysian Investment Development Authority (Mida). Cost of doing business in Singapore has also spiked, he noted.

Out of RM25 billion recently announced to support the National Semiconductor Strategy (NSS), “is it possible [for] some part of it [to] go into a joint investment fund, [in which] Singapore’s Economic Development Board or other entities will also provide money into the ecosystem?” he asked at an industry forum.

Ong also said the Johor-Singapore Special Economic Zone could also replicate the success of China's Greater Bay Area. The area encompassing Hong Kong, Macau and nine cities in Guangdong is also known as the “World’s Factory” and home to more than 50,000 manufacturers.

"So in the same model, it can include Bintan, Batam in Indonesia and it can include Penang and also Kulim in Malaysia as well,” Ong said. The model could then be expanded to get more countries on board, such as Vietnam, Thailand and Indonesia, he proposed.

In the nearer term, Ong said Johor can leverage its strengths to carve a niche in the semiconductor industry, highlighting that its proximity to Singapore's established ecosystem and lower operational costs may allow specialisation in higher value-added activities within the semiconductor supply chain.

"With the Johor-Singapore Special Economic Zone, there may be opportunities to do joint investment features for higher value-added activities there and perhaps even using that platform to pay Malaysians higher salaries for them to come back to work in Malaysia in these companies," he noted.

Johor could also pitch to draw in higher-value activities such as testing of autonomous vehicle, electric vehicles, and generative artificial intelligence to the state, to take advantage of the ecosystem, lower cost, diverse population, and integration with Singapore, Ong added.