KUALA LUMPUR (July 15): Some 39% of companies surveyed reported better business performance in the second quarter of 2024 (2Q2024) compared with 1Q2024, according to the Malaysia Semiconductor Industry Association (MSIA) Inaugural MSIA E&E/Semiconductor Quarterly Pulse Survey for 2Q2024.

"The biggest challenges in 2Q2024 were talent shortage and market competition/order book," it said in a statement on Monday.

Looking ahead to 3Q2024, a notable 60% of companies expressed optimism, driven primarily by demand for consumer electronics, automotive advancements and artificial intelligence (AI).

The survey also revealed that 85% of companies plan to hire engineers and technicians in the upcoming quarter, highlighting the industry's need for skilled labour.

Companies are not only optimistic about short-term growth but also have a favorable investment outlook for 3Q2024, with 58% of respondents planning to invest in new technologies, expand into new markets and develop new products.

Furthermore, 72% of companies have an optimistic overall outlook for the next 12 months, indicating sustained confidence in the sector's long-term prospects.

Generative AI emerged as a special focus in the 2Q survey, with 74% of companies expressing a positive sentiment towards its adoption.

These respondents believe generative AI will significantly impact their operations and strategic planning across the board.

Overall, the survey results suggest that Malaysia's semiconductor industry is poised for growth, supported by advancements in AI and other technologies, while also recognising the importance of addressing talent shortages and market competition to sustain this momentum.

The objective of this survey is to assess the sentiment, trends, challenges, and opportunities within the Malaysia E&E/semiconductor industry on a quarterly basis.

The E&E industry is one of the bellwether sectors in Malaysia. In 2023, Malaysia’s E&E exports amounted to RM575 billion, accounting for a 40% share of total exports, more than the next nine biggest export sectors combined. The sector employs a workforce of more than 600,000.

The E&E sector is poised for further growth with approved FDI and DDI investments of RM262 billion from 2021 to 2023.