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Not all electronic and semiconductor firms in Penang are retrenching their workers

GEORGE TOWN: Not all electronic and semiconductor companies in Penang are impacted by the global slowdown and are implementing retrenchment exercises.

Some still carry out their expansion plans amid uncertainties in the global market.

The Free Industrial Zone, Penang, Companies’ Association’s (Frepenca) committee member Datuk Heng Huck Lee said it all depended on the particular sector that the company was supporting.

Heng was commenting on the recent closure of the Rubicon Technology Inc plant in Prai Industrial Estate and TS Solartech Sdn Bhd’s retrenchment exercise for its plant in Penang Science Park, Bukit Minyak.

Rubicon supplies substrates to the LED industry, while TS Solartech, a subsidiary of Tek Seng Holdings Bhd, produces solar cells.

“The smart devices, radio frequency (RF) chip business, the test and vision inspection equipment, and the automotive sectors are doing well.

“Some of the companies involved in the relevant businesses are still expanding,” Heng said.

For example, Mini-Circuits Technologies Sdn Bhd, a Frepenca member, is expanding its operations on an 11-acre site in Bayan Lepas.

Mini-Circuits chairman and president Datuk Seri Kelvin Kiew said the RM500mil third facility was scheduled to begin operations in the second quarter 2017, and will hire 150 engineers.

Another Frepenca member, Integrated Device Technology (Malaysia) Sdn Bhd (IDT) will start the production of new generation of sensors at its newly upgraded RM20mil Bayan Lepas facility by the end of 2016.

Its managing director Ang Hee Lai said the group planned also to grow its workforce to 550 from 500 by this year end.

Vitrox Corp Bhd, although not a Frepenca member, expects its new manufacturing facility to be ready for operations by the second half of next year.

“The 450,000-sq-ft plant would triple the present production capacity,” Vitrox chief executive officer Chu Jenn Weng had said in an earlier interview.

The Federation of Malaysian Manufacturers vice-president Lee Teong Li said he had yet to hear from its members that they were retrenching employees.

“Most of our members are small and medium size manufacturers who are largely involved in the food production, plastic packaging, and metal fabrication sector, which are not the impacted sectors.

“About 30% of them are involved in supporting the electronic and semiconductor sectors, which are impacted by the global downturn,” Lee said.

Meanwhile, Tek Seng executive chairman Loh Kok Beng said the 200 workers the company was retrenching had yet to be confirmed.

“In May and June, we interviewed 400 workers and engaged all of them.

“We are retrenching 200 of them because they are found not to be suitable.

“There is currently a slowdown in the solar cell market because many contractors are waiting for solar cell price to drop further before they implement installation projects,” Loh said.

Seagate Technology will be closing its manufacturing plant in Bayan Lepas at the end of June 2017.

Last month, the company offered about 3,000 of its employees in Penang a fair compensation scheme, according to the number of years each had worked with Seagate.

The workers will be let off in four phases in September 2016, and January, March, and June 2017.

In a recent announcement, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the manufacturing sector in the country had seen the creation of some 90,000 jobs in the past 18 months, offsetting the loss of about 10,000 manufacturing jobs resulting from the economic slowdown.

“Malaysia continued to be a preferred location for investments, as reflected by the performance of approved investments in the manufacturing, services and primary sectors in the first quarter of 2016.

“In the first quarter, Malaysia recorded a total of 1,271 projects with investments of RM37.3bil.

“These investments will create 39,990 job opportunities,” Mustapa said.