Find Out About the Electronics and Electrical Sector (E&E) in Malaysia and the Job Demand & Salary
The E&E industry is one of the major industries that contributed to Malaysia’s exports of manufactured goods, jobs creations as well as income growth. As outlined in the New Industrial Master Plan (NIMP) 2030, the E&E sector was identified as one of the high-growth, high-value industries (HGHV). In addition, Malaysia is ranked as the seventh largest semiconductor exporter, with a global market share of seven per cent and Malaysia is now supplying approximately 13 per cent of the demand for packaging and testing, along with certain levels of wafer fabrication, such as 200nm.
With an 18% growth in 2021 and an impressive 30% growth in 2022, the E&E segment has been expanding significantly in recent years as the country has successfully fostered an active ecosystem for E&E manufacturing, attracting substantial investments. In 2021, the E&E industry recorded investments amounting to RM148bil, and from January to September 2022, 83 E&E projects with investments were approved, accumulating its total value to RM22.5bil.
Notably, E&E products contributed 39.8% (RM57.41bil) of total exports during this period, and according to the 12th Malaysia Plan, the E&E industry is expected to contribute a total of RM120bil to the GDP by 2025. A vital component of the E&E sector is the semiconductor industry, which in itself is projected to reach US$1 trillion (RM4.5 trillion) in global revenue in 2023.
This industry plays a key role in enabling various technological applications, such as IoT, medical devices, industrial automation, transportation systems, aerospace technology, and renewable energy solutions, among others.
In the 1970s, In the 1970s, the ‘Eight Samurai’ (National Semiconductor, Intel, Advanced Micro Devices (AMD), OSRAM, Hewlett Packard, Bosch, Hitachi and Clarion) began operations at the Bayan Lepas Industrial Park in Penang. Since then, some 300 multinational corporations (MNCs) have started offices in Malaysia, creating an electronics and electrical (E&E) hub that has been likened to the Silicon Valley in the United States.
The Malaysian Electronics and Electrical sector (E&E) is an important contributor to the economy. In 2019 alone, it accounted for 6 percent of Malaysia’s gross national income (GNI), 575,000 jobs — representing more than 40% of total manufacturing labour — and 41 percent of Malaysia’s total exports. The electrical and electronics (E&E) industry is the largest single contributor to the manufacturing sector, accounting for 26.1% of total manufacturing output (Source: EPU, Pemandu).
Malaysia’s world-class electronics industry is the top sectorial employer and exporter within the manufacturing sector. The E&E industry is also Malaysia’s most liberalised sector. The electrical and electronics (E&E) industry produces and sells electronic equipment for industries and electronics products for consumers such as televisions, mobile devices and printed circuit boards. The industry includes telecommunications, electronic components, appliances, industrial electronics and consumer electronics. Electronics companies may produce electrical equipment, manufacture electrical components and sell items at retail to make their products available for consumers.
The development of high value and high growth industries in Malaysia will increase demand for skilled manpower, which then leads to better wages and compensation for Malaysian employees. Therefore, students wanting to pursue a career in engineering should consider taking up electrical & electronic engineering due to its immense contribution to Malaysia’s economy and future growth, long-standing history with lots of SME’s, large local companies (LLCs) and multinational corporations (MNCs) offering lots of job opportunities.
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Malaysian Electronics and Electrical sector (E&E) Industry Outlook & Job Demand
Global E&E Outlook
A new World Semiconductor Trade Statistics (WSTS) report has also forecast that annual global sales would increase 13.1% in 2024, after falling 9.4% in 2023.WSTS projected worldwide semiconductor sales to reach US$520bil in 2023 (down from the 2022 sales total of US$574.1bil) and hit US$588.4bil in 2024.
Malaysia E&E Industry Outlook
Chong Keat, Electrical & Electronic Engineering at Heriot-Watt University Malaysia
Malaysia’s exports, which dropped much lower than anticipated in December 2023, is expected to get a boost from an anticipated upturn in the global technology cycle in 2024. Along with other improving global factors, this is expected to bolster the country’s export numbers this year, according to economists.
December’s 10% year-on-year decline — double the Bloomberg consensus forecast of a 5% fall — pulled trade surplus down to RM11.8 billion, the lowest recorded since May 2020.
Overall exports for 2023 fell 8%, the biggest contraction since 2009, to RM1.43 trillion, though it is the third year in a row that Malaysian exports had surpassed the RM1 trillion mark.
In 2021, the E&E industry recorded investments worth RM148 billion, of which RM146.3 billion (98.8%) was from Foreign Direct Investment (FDI) while RM1.7 billion (1.1%) came from domestic investors. The approved investments are expected to create a total of 28,362 job opportunities in the industry.
From January to September 2022, a total of 83 E&E projects with investments of RM22.5 billion were approved, of which 31 were new projects with investments of RM2.0 billion, and 52 were expansion/diversification projects with investments worth RM20.5 billion. These projects are expected to generate more than 26,668 new jobs, including highly-skilled positions such as managerial roles, engineers, and technicians. Foreign entities accounted for the bulk of the total investments at RM21.3 billion (94.7%) while domestic investments amounted to RM1.2 billion (5.3%).
For the given period above, E&E products contributed 39.8% or RM57.41 billion towards Malaysia’s total exports, which amounted to RM144.31 billion. Under the Twelfth Malaysia Plan (12MP), the E&E industry is targeted to contribute RM120 billion to Malaysia’s GDP in 2025, compared to RM86.1 billion in 2020. (MIDA).
In recent years, multinational corporations have been upgrading their semiconductor operations by establishing integrated manufacturing centres that can combine manufacturing processes with those of research and development, product design and development, as well as marketing, and distribution.
This shows that the country is striving to establish a robust and well-developed manufacturing sector within the country by getting the necessary industrial infrastructure to support its growth, which will in turn attract both local and international businesses. As the global economic landscape evolves, developers in the country must adapt to develop more innovative industrial parks and facilities that can effectively cater to the needs of modern manufacturing companies.
Semiconductors
The government is committed to developing the semiconductor industry which is now a strategic source of income for the country, said Deputy Investment, Trade and Industry (MITI) Minister Liew Chin Tong. We aim to create 100 technology companies with an annual revenue of RM1 billion before 2030.
“Currently, we only have nine local technology companies that can generate RM1 billion a year. Another 10 companies generate between RM100 million and RM1 billion a year
Semiconductor manufacturing is one of the largest manufacturing activities in Malaysia, and the key enabling technology for many applications including IoT, automotives, medical, industrial, transportation, aerospace, and energy applications. The ecosystem is predominantly controlled by MNCs who have a presence by growing Malaysian companies. As seen from the composition of companies across the semiconductor value chain in Malaysia, production in the country is mainly focused towards the downstream sector such as back-end manufacturing and systems integration.
Moving forward, many MNCs in semiconductor operations have upgraded their facilities into integrated manufacturing centres that fuse their manufacturing activities with R&D, product Design and Development (D&D), marketing, and distribution activities. However, most local companies – particularly Small- and Medium-sized Enterprises (SMEs) – fare lower than larger corporations on technological advancement; as such, significant efforts are needed to modernise SMEs and bring them on par with the larger players in order to drive the industry further.
There are many ongoing initiatives undertaken by the Government in collaboration with the private sector and academia to enhance the contribution of the E&E industry towards regenerating economic growth and moving up the value chain under the 12MP and the upcoming New Industrial Master Plan (New IMP).
These initiatives include reducing gaps between the talent produced and industry requirements; implementing internship or apprenticeship programmes by leveraging international standards and incentivising companies to participate; developing a structured programme for the continuous development and re-skilling of employees with the advent of new technologies; and building up the competency and presence of local players in joining the race to be integrated into the global value chain ecosystem.
Malaysia’s Electrical & Electronic (E&E) Workforce
E&E industry employs about 700,000 people of whom 30 to 40 percent are engineers and managers. Meanwhile, foreign direct investments (FDIs) continue to grow while Design & Development (D&D) and business process operations/services have also grown significantly. Around 12,500 are skilled engineers, 3,500 are Masters graduates and 191 PhD holders. 7500 are involved in R&D.
According to Mida, among the high value E&E investments is from Texas Instruments Malaysia Sdn Bhd. The approved investments by Texas Instruments, that totalled RM7.4 billion, was in semiconductor devices and high-performance integrated analogue circuits.
In August 2023, it was reported that German semiconductor giant Infineon Technologies AG announced that it would invest up to €5 billion (RM24.9 billion) to expand its manufacturing facilities in Kulim, Kedah, over the next five years.
Mida also stated that a total 48.1 per cent of the recorded FDI in the country for the first half of this year consisted of new projects, reaffirming foreign investors’ confidence in Malaysia as a preferred investment destination. The approved investments in the manufacturing sector is expected to create a total of 26,759 potential job opportunities, out of which 10,892 (40.7 per cent) are high-impact jobs.
While Penang has the most E&E companies, there are also big players in Kedah, Selangor, Melaka, and Johor. Nearly 560,000 job opportunities have been created in the industry. According to SEMI, a global industry association representing the electronics manufacturing and design supply chain, Penang itself contributes approximately 8% of (Malaysia’s total 13%) the global back-end semiconductor output.
The state is one of the most significant microelectronics assembly, packaging, and testing hubs in the world. This has successfully positioned Malaysia in the global supply chain of electronic manufacturing services, outsourced semiconductor assembly and testing (OSAT) as well as in research, design, and development.
Malaysia’s move into Industry Revolution 4.0 as well as the Internet of Things (IoT) technology is made possible by the existence of its established (E&E) sector. In short, our rapid industrialisation and high ranking among the top group of trading nations globally were mainly contributed by this industry.
Malaysian Investment Development Authority (MIDA) – E&E Industry to Create Value Jobs
MIDA has played a significant role in shaping Malaysia’s economic growth by attracting high-quality investments from multinational corporations (MNCs) that prioritise sustainable operations. These investments assume a pivotal role in the country’s economic development, boasting a substantial multiplier effect.
The electrical and electronics (E&E) industry, a formidable contributor, producing 13% of global back-end semiconductors and driving 40% of the nation’s export output. With ambitious targets set at RM120 billion by 2025 in GDP growth and RM495 billion in export earnings, the industry is a catalyst for Malaysia’s economic progress.
As a major hub in the semiconductor supply chain, Malaysia is well-positioned to capture further business. The semiconductor manufacturing activity, predominantly led by MNCs, holds immense significance across various applications, from the Internet of Things (IoT) to automotive, medical, industrial, transportation, aerospace, and energy.
Highlighting this growth, a total of 86 E&E projects valued at RM57.4 billion gained approval from January to September 2023. Foreign investments constituted a staggering 98% of the total, amounting to RM56.3 billion, with domestic investments comprising RM1.1 billion, fostering the creation of 15,343 job opportunities.
However, amidst this prosperity, the industry grapples with challenges such as talent shortages and high turnover rates. A 2022 survey by the Malaysia Semiconductor Industry Association (MSIA) revealed engineers at the forefront, constituting 65% of talent shortages.
As MNCs are advancing their operations, integrating manufacturing with research and development (R&D), product design and development (D&D), marketing, and distribution, Malaysia recognises the pivotal role of cultivating local talent. MIDA, with an eye on economic growth and innovation, is committed to building capacity and talent in integrated circuit (IC) design, engineering, and testing.
The New Industrial Master Plan (NIMP) 2030 stands a beacon, providing a clear direction, showcasing vast job opportunities in the manufacturing sector with higher-paying salaries. This strategic vision aims not only to attract but also to retain and cultivate talent within the fast-growing E&E industry. At its core, this vision seeks to create an abundance of high-value job opportunities, transforming Malaysia’s reliance on relatively low-cost foreign labour.
Collaboration with industry leaders, academic institutions, and training centres is integral to fostering a culture of innovation and excellence within the E&E industry. Embracing emerging technologies such as artificial intelligence, IoT, and advanced automation, Malaysia aims to address talent shortages, mitigate high turnover rates, and create a workforce capable of driving innovation and fuelling unprecedented growth.
The rise of MNCs establishing their operations in Malaysia serves as a testament to the nation’s attractiveness for investment. These MNCs including Dyson, choose to establish global in-house capability centres, remaining cost-competitive while delivering on their brand promises. Dyson, through the Dyson Malaysia Development Centre (MDC), exemplifies Malaysia’s commitment to talent development and retention. This centre not only offers a perfect opportunity for local talent to remain in their home countries but also gain global exposure.
Initiatives like the MDC reaffirm Malaysia’s dedication to talent development, empowering skilled professionals to contribute to cutting-edge innovations. This not only strengthens the local workforce but also elevates the nation’s competitiveness on the global stage, positioning Malaysia as a hub for innovation and sustainable economic growth.
E&E Talent shortage and mismatch in Malaysia
Eugene Ong, Electrical & Electronic Engineering at UCSI University
The talent shortage starts with university graduates. Nowadays, university students prefer software design to hardware design as they can see results faster. Unfortunately, there is a shortage of design talent around the world, let alone Malaysia.
The Malaysian E&E sector currently does not adequately meet market demand. The difficulty is in finding enough talent
capable of satisfying the demands in growth of the industry. The domestic pool of experienced engineers just isn’t big enough to accommodate industry demand.
In today’s age of globalisation and innovation, room for career progression has become one of the most important attributes that graduates and professionals look for in a job. What many are unaware of is that with its fast-paced,
technologically-driven environment and multiple links to reputable companies around the world, Malaysia’s E&E sector is well-placed to offer jobseekers precisely that.
There is also a mismatch of skills and competencies to industry needs. Malaysia has insufficient qualified and experienced technical workers to participate in higher-value activities, partly due to the low demand for masters and PhD holders.
This trend has discouraged university graduates to pursue postgraduate studies as most of the job requirements are not knowledge-intensive. In the long run, local engineers could not progress in their careers without specialist technical knowledge ad skills, hampering Malaysia’s ability to climb up the E&E value chain.
The Institution of Engineers Malaysia (IEM) president David Lai Kong Phooi said the engineer to population ratio for developed nations is 1:100. For Malaysia with a population of 32 million, the number of engineers should be 300,000.
Based on the Education Ministry’s statistics from 1997 to 2017, the average number of engineers produced per year by local institutions of higher learning – excluding graduates from foreign universities – is about 16,000. The cumulative total of all engineers produced from 1997 to 2017 is estimated to be about 341,109.
It may appear that the number of engineers produced are sufficient for Malaysia, but there are only 128,000 professional and graduate engineers registered with the Board of Engineers Malaysia (BEM).
While the number of varsity-trained engineers has been very encouraging in terms of meeting the country’s target, we’re still facing a shortage of engineers – perhaps not in terms of actual numbers, but in terms of employability, and retention of talents, within the engineering sector and with Malaysian companies, said Lai.
Based on Talent Corp’s Critical Occupation List, he said the highest demand for engineers are in the civil, mechanical, electrical, and chemical disciplines.
Lai said there are many reasons why engineers turn to other jobs. For some, it could be a lack of interest in the field or for career advancement.
“The entry level remuneration of engineers is among the highest compared to graduates from other fields.
It’s easy for engineers to switch careers at a later stage of their careers because they’re very analytical and easy to train. If they want to go into consultancy, planning, finance, or investment, they can pick it up with some training. But the reverse is not true. Non-engineers will find it hard to switch to this profession.
English is an Important Skillset for E&E Graduates
Soft skills, he said, is very important especially in an MNC.
“Expect daily meetings to discuss projects with your counterparts from countries like the US. If you cannot express yourself, how are they going to understand you? You’ll slow the meeting down and waste everyone’s time,” he said, adding that all the literature, and instructions on technology, are in English.
Those who are weak in the language will take a longer time to read. This results in lower productivity.
“You can’t keep checking the dictionary or asking your colleagues.”
Salary for Electrical & Electronic Engineers in Malaysia
Lyngkaran, Engineering at Taylor’s University
Junior engineers can earn between RM2,500 and RM3,500 depending on their location and qualification. High performers can expect promotions, a yearly pay raise of between 10% and 20%, and travel opportunities.
Today, the E&E sector employs nearly a quarter of Malaysia’s 2.5 million-strong manufacturing workforce.
The E&E and optical subsector is also the largest employer in the manufacturing sector, hiring approximately 562,000 workers of the 2.5 million manufacturing workforce in 2018. The average wages paid out to the E&E sector is one of the highest among the manufacturing subsectors and significantly higher than the average wages paid out in the service sector.
The average wages paid out per employee in the E&E subsector is RM46,451 in 2018 which places it second after the Petroleum, Chemicals and Plastics subsector with average wages paid out at RM52,248.
Talents in the manufacturing and operations sector, according to the Department of Statistics in Malaysia (DOSM), have also stood to gain in these favourable conditions, having experienced an overall wage growth of ten per cent. To add, the overall number of individuals working in the sector had increased by two per cent over the last year.
With businesses looking to expand in the coming months, manufacturing and operations employers will be all the more active in their recruitment efforts. However, the extremely talent short market in this sector may pose as a challenge especially within niche specialisms directly required to drive business growth.
One of the main reasons driving productivity and wage growth in the E&E sector is investments in technology and equipment. This sector, more than any other sector in the country, is at the forefront of Industry 4.0 adoption including big data analytics, internet of things (IoT) and systems integration.
E&E Future Growth
Hanson, Foundation in Science (Engineering) at UCSI University
The E&E industry in Malaysia, particularly the semiconductor ecosystem, has critical cross-industry linkages and applications, including new growth in telecommunication and medical devices, as well as Internet-capable industrial technologies and mobile electronic systems, such as the Internet of Things (IoT), Virtual or Augmented Reality (VR/AR), automotive electronics, wearable electronics, and personal computing. Semiconductors will continue to spearhead the growth of the industry on the back of demand in the usage of mobile devices, storage devices, opto-electronics, embedded technology, data analytics, artificial intelligence and 5G.
Furthermore, the introduction of mid-range smartphones, IoT devices and the adoption of electronic functions in the automotive industry should drive demand for semiconductors, integrated circuits and printed circuit board assembly (PCBA) products, popularly also known as electronic motherboards.
Besides developing their capabilities in areas such as R&D and business development, they also need to move across all industrial segments that use E&E components such as automation, industrial electronics, semiconductors, electronics manufacturing services, storage, light emitting diode, solar and IoT.
An exciting new area in the E&E sector is the use of flexible hybrid electronics (FHE), which underlies several new industrial technologies and wearable electronics. FHE makes it possible to produce lightweight, low cost, flexible, stretchable, and efficient smart products with a variety of applications. These include health-monitoring wearables and rugged sensors.
MIDA is ramping up efforts in developing the ecosystem to cater to the growing needs of the E&E industry in embracing Industry 4.0. These include investments in core focus areas such as FHE materials scale-up, thinned device processing, device/sensor integrated printing and packaging, system design tools, and reliability testing and modelling.
Global mega trends will both impact, and be impacted by, the E&E industry. Such trends include Industry 4.0; pervasive robotics and automation in manufacturing facilities, logistics and warehousing, and the increasing adoption of intelligent home and building technologies; a move towards modernising ‘lean’ manufacturing; and the digital lifestyle/economy.
Finally, the future of E&E will be shaped by developments in nanotechnology. With established players and a strong global presence, the E&E sector can jumpstart expansions in nanoelectronics and nanophotonics etc.
Skills in Demand
Vincent Hoy, Graduated from Mechatronic Engineering at Asia Pacific University (APU)
Manufacturing and operations are key functions across an array of industries in Malaysia, with Automotive, Electrical and Electronics (E&E) Products and Petroleum, Chemical, Rubber and Plastic Products being main drivers of the country’s economic advancements. The country also has been lauded internationally for its “innovation prowess” when it comes to manufacturing medical devices.
As Malaysia takes steps to becoming a world class manufacturing hub, many businesses ––especially within FMCG, medical devices and pharmaceutical industries –– are placing a greater emphasis on R&D and product design.
Many foreign MNCs with bases in Malaysia have been expanding their design centres to improve their product offerings. As a result, there has been a swell in demand for research engineers and specialists to improve existing products and discover new and cost-efficient production methods. In addition, product design engineers are also highly required to innovatively create new product offerings while taking into consideration product lifecycles and customer needs.
Furthermore, the semiconductor sector is poised for growth; extremely favourable predictions by experts suggesting that the electrical and electronics sector in Malaysia will grow by almost ten per cent annually. The Star reports: “[AmBank Research] said Malaysia’s E&E sector has successfully positioned itself in the global supply chain of electronic manufacturing services, outsourced semiconductor assembly and testing as well as in research, design and development.”
Indeed, E&E manufacturing in the country has matured alongside industry-wide endeavours to keep pace with developments surrounding the Internet of Things (IoT) and automation. The growing demand for wearable devices and smart home applications, alongside the strong automotive industry, is resulting in a heightened need for both production and quality control experts.
Now more so than ever, manufacturing and operations candidates with multilingual fluency are highly regarded amongst employers across the industry. This is especially so for international or foreign companies which have plants within Malaysia, where the majority of the ground staff (especially within the factories) are effectively monolingual in their mother tongues such as Malay or Mandarin. Production and plant managers who are fluent in English, Malay and Mandarin make for the ideal candidates in mid-level or management roles.
Average Salary for Electrical & Electronic (E&E) Engineers in Malaysia
- 2024 Hays Salary Guide Malaysia – (Salaries are yearly in ‘000 RM) ELECTRONICS
- PRODUCTION
- Engineer 40 – 70
- Supervisor 70 – 120
- Manager 180 – 240
- Director 300 – 450
- Vice-President 450 – 700
- ENGINEERING
- Engineer 40 – 70
- Supervisor 70 – 120
- Manager 180 – 240
- Director 300 – 450
- Vice-President 450 – 700
- R&D
- Engineer 40 – 70
- Supervisor 70 – 120
- Manager 180 – 240
- Director 300 – 450
- QUALITY
- Engineer 40 – 70
- Supervisor 70 – 120
- Manager 180 – 240
- Director 300 – 450
- PROJECT MANAGEMENT
- Engineer 40 – 70
- Supervisor 70 – 100
- Manager 120 – 180
- Director 300 – 420
- PRODUCTION
- Jobstreet.com 2019 Salary Report
- Monthly Salary for Senior Managers in Engineering
- Northern Region Manufacturing – E&E Average Minimum Salary is RM14,484 and Average Maximum Salary is RM20,447
- Northern Region Manufacturing – SemiCon Average Minimum Salary is RM10,593 and Average Maximum Salary is RM14,900
- Central Region Manufacturing – E&E Average Minimum Salary is RM6,931 and Average Maximum Salary is RM10,421