keynote 1.13- 031112 dr norlela wif s3

Revisiting Malaysia's technology and R&D-related policy

studies and findings from 1990-2012 - review of effectiveness towards the technological capabilities of

companies and industrial development

by Dr Norlela Ariffin

[email protected] , hp +6012 200 2871

Senior VP, Excellent Spring Sdn Bhd

Director, Penang Women Development Centre (PWDC)

International Symposium on Accelerating Innovation in Developing Countries KL Convention Centre, November 3, 2012

Session 3: Measuring innovation and its socio-economic and environmental impacts

mailto:[email protected]

Revisiting Malaysia's technology and R&D-related policy studies and findings from 1990-2012 - review of effectiveness towards the technological capabilities of companies and industrial development

This paper revisits my research on Malaysia’s technological and R&D status since 1990 till 2012:

• Intensification of Research Areas in Priority Areas (IRPA) project: An Evaluation of R&D Programs under the IRPA Mechanism Financed in the Fifth Malaysia Plan - UUM Survey (1992).

• IRPA program on the ‘Development of Advanced Semiconductor Package’ (2006-2007)

– Re-activation role as new industry partner; full-time on-site research on ‘3D Quad Flat No-Lead Semiconductor Package’ for 1 year at AIC semiconductor plant commenced in December 2006.

• - Program members: AIC Semiconductor Sdn Bhd (new industry partner), University Kebangsaan Malaysia (new program leader), University Malaya and AMREC (Advanced Material Research Centre, SIRIM).

• The World Bank-Ministry of Science, Technology and the Environment ‘Review of the National Technology Development Policy, Malaysia: Output 5 - A Demand-Driven Perspective on Industrial

Technology Policy in Malaysia’ (1995). • - As Consultant, East Asia & Pacific – Country Department I (EA1), World Bank.

• UNDP program: ‘Technology transfer to Malaysia: A study of electronics and electrical firms and the supporting industries in Klang Valley’ (1995/1996)

• Corporate Sector Survey on Productivity and Investment Climate Study: Innovation Capability Audit Survey (2003). Report by MIGHT for the Economic Planning Unit, Prime Minister’s Department, Malaysia.

• - As lead consultant and collaborated with Prof Micheal Hobday (SPRU-CENTRIM) who benchmarked leading companies in Korea and Thailand.

• Norlela Ariffin (2003). Initial policy prescription proposal for E&E industry: Spearheading the growth of analog design capabilities in Malaysia : EPU Innovation Audit - Policy Paper submitted to Dato’ Halipah Esa, Deputy Director General (Macro), Economic Planning Unit, 26 March.

• : ‘Learning Processes and Technological Capability-Accumulation Paths: Firms in the Electronics Industry in the Industrial District of Manaus, Brazil’. • • National Technology Mapping Programme II: Wood, Machinery and Food (2002). Report by PRIMA for the Economic Planning Unit, Malaysia.

– As project managing consultant – Study involves competency audit survey of companies, formulating technology roadmaps and conducting international benchmarking.

Norlela Ariffin (2011), ‘Innovating up to speed’, Penang Economic Monthly, May, Issue 05.11, pp. 8-17.

• Norlela Ariffin currently promotes social innovation that will increase the income of single mothers and women in rural and urban poor areas at the Single Mothers and Women Cooperative in mainland Penang and the Women Development Corporation (PWDC) by commercialising innovative university research in Penang and promoting biomass utilisation into productive economic generation.

• Corporate Sector Survey on Productivity and Investment Climate Study: Innovation Capability Audit Survey (2003). Report by MIGHT for the Economic Planning Unit, Prime Minister’s Department, Malaysia.

• - As lead consultant and collaborated with Prof Micheal Hobday (SPRU-CENTRIM) who benchmarked leading companies in Korea and Thailand.

• Initiated and collaborated with the Selangor Human Resources Development Centre (SHRDC) to secure special funding for AIC Semiconductor Sdn

Bhd for the ‘QFN semiconductor packaging Pilot Line’ under the Graduate Re-skilling Training for the ‘Masters by Apprenticeship’ degree program, 2005.

•

• “MECD Study on Entrepreneur Development at the Corridor Development”, • 28th December 07 till March 31 2008 • • As Project and Research Advisor to Innovation Associates (iA Group), 49th floor, Petronas Tower 2, KLCC, 50088 Kuala Lumpur Ariffin, Norlela (2010) ‘Internationalisation of technological innovative capabilities: levels, types and speed (learning rates) in the electronics industry in

Malaysia’, Int. J. Technological Learning, Innovation and Development, Vol. 3, No. 4, pp.347–391.

• Full-time member of the Sustainable Urban Development (i.e. Waste Management) City & Corridor PEMANDU Lab – Northern Corridor, Sept 2nd -

Nov 4th 2011. • Consultant to Malaysian Industry-Government Group for High Technology (MIGHT) to develop for the Malaysia Biomass Action Plan that would focus

on sustainable production and SMEs, 2012.

The question of how Malaysia can move to the next high stage of development and innovation-driven economy is:

• To increase factors that contributes to the

increase of global competitiveness.

• The other approach, which can be implemented simultaneously, is to look at Malaysia’s existing strengths and to focus efforts on strengthening them.

• A third approach is to focus on the current realities of where companies and industries are and where they will be on their next thresholds.

0

200

400

600

800

1000

1200

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GDP (USD Billions)

Malaysia

Korea

Singapore

Taiwan

Source : IMF, April 2009

Law promotion of SME Innovation (2001): 14,626 Korean SMEs have received Innobiz certification (as of end 2008) 1. Manufacturing 2. Services/Non-Mfg 3. Agriculture 4. Construction 5. Environment 6. Biotech 7. Software 8. Design

Tech Policy Impact to GDP after Financial Crisis

Law promotion of High-Tech Start-Ups (Venture Business) (1998)

In order for Malaysia as a whole to achieve high-income status, it is useful to examine factors which contributed to the global competitiveness of 144 countries over time, as ranked in the World Economic Forum’s Global Competitive Ranking.

Rank INDICATORSCURRENT

WEIGHTAGE OF MALAYSIA

FUTURE / TARGET WEIGHTAGE OF

MALAYSIASub Indicators Beta

RSquared

1

Microeconomic Competitiveness

(MICRO) 0.35 0.48

Factor (Input) Conditions

Communications Infrastructure

Telephone Lines per 100 population

0.036 0.848

2 Context for Strategy and Rivalry

Context for Strategy and Rivalry

Regulatory Quality 0.851 0.841

3 Factor (Input) Conditions


Mobile Telephone Subscribers per 100 population

0.023 0.833

4 Innovation Infrastructure

Utility Patents per Million Population

0.256 0.825

5 Company Operations and Strategy (COS)

Strategy and Operational Effectiveness

Production Process Sophistication

0.615 0.817

6 Factor (Input) Conditions


Internet Access in schools 0.471 0.816

7 Logistical Infrastructure

Quality of Electricity Supply 0.463 0.812

8 Social Infrastructure and Political Institutions (SIPI)

0.42 0.36

Rule of Law Rule of Law (WB)****** 0.678 0.811

9 Control of Corruption (WB)*****

0.612 0.798

10 Human Capacity Human Capacity Life Expectancy 0.068 0.793

Increasing factors that contribute to the increase of global competitiveness - based on data from 144 countries over time

• It is significant to note that factors ranked highly as contributing to global competitiveness are a combination of infrastructure (Telephone Lines ranked at #1 and ‘Internet Access in Schools’ at #6 – this bodes well for Penang through the free WIFI provided by the state government),

• ‘Utility Patents’ are ranked highly at #4. A utility innovation is an exclusive right granted for a "minor" invention which is not required to satisfy the test of inventiveness which is required of a patent (a patent is protected for 20 years from the date of filing while a utility innovation is protected 10 + 5 + 5 years from the date of filing subject to use).

• ‘Production Process Sophistication’ ranked at #5 in which Greater Penang and Klang Valley are famed for having the fastest production ramp-up times in the world. That is why when new production plants were being set up in China in the early 2000s, Malaysians were transferred from MNC corporate offices to fill key managerial positions.

• On the other hand, ‘Technology Transfer and FDI’ is ranked at the fourth lowest factor at #119 out of a total of 122 factors examined.

• This may prove to be significant in the future as the industrial growth of Greater Penang, Klang Valley and the rest of Malaysia’s industrial growth have been primarily driven by FDI.

Table 3: FDI and Technology Transfer’ is among Least Significant Factor to Global

Competitiveness

Source: Analysis based on the World Economic Forum (2008-2009).

• Of other greater significance are Good Governance Factors such as ‘Rule of Law’ and ‘Control of Corruption’, ranked #8 and #9, respectively.

• Problematic factors for doing business are shown in Figure 1. Figure 1: Problematic Factors for Doing Business in Malaysia

Source: Global Competitiveness Report 2008-2009, World Economic Forum

Reinforcing Malaysia’s Existing Strengths

• Moving Malaysia to the next stage of development is also about looking at Malaysia’s existing strengths and to focus efforts on boosting these, as well as focusing on the current realities of where companies and industries are and where they will be on their next thresholds.

• In 2010, Penang received the highest level of foreign direct investment in

Malaysia with Selangor bringing in the second highest amount.

• Penang and Klang Valley have the highest concentration of employment and the most established electronics industry in Malaysia.

• Currently, Malaysia is among the world’s five largest exporters of semiconductor devices, and 96.3% of semiconductor companies are foreign-owned or MNC subsidiaries.

Build Up Routine Production Capability To Produce

More Complex, Higher Value-Added Products

2

Production Capability

Level

More complex, higher

value-added products :

digital, DVD, flat-

screen CTV, CDMA

LP-link MP-link

LP-link MP-link

Office & computer

equipment

LP-link MP-link

1

LP-link MP-link

Consumer Electronics (Analogue)

Parts to Full Assembly

Starts with a few

relatively simple discrete components,

analogue products, parts assembly, SKD,

1970 1980 1990 2000 Time

1st Dimension of Technological

Development

12

Contract or Sub-Assembly

Manufacturer

Solectron

Flextronics

Celestics

SCI

Sanmina

Plexus

Jabil

ACT

Local: UNICO, BCM,

AIS, AIC Inspirasi

Chip/Component

Manufacturer

Infineon

Philips

Lucent

ST Micro

Motorola

Intel

SIS

Sony

Liteon

Asus

Sampo

Compal

Outsourced Chip

Manufacturer

Wafer foundry:

TSMC

UMC

CSM

Tower

Local:

Silterra

1st Silicon

On semiconductors

MIMOS

Components

Assembly & test:

Amkor,

ASE

SPIL

STAT-ChipPAC

Local:

Carsem

Unisem

Globetronics

AIC Semicon

OEM

Sony

Cisco

Nokia

Philips

Sharp

Dell

Panasonic

HP/Compaq

IBM

Local:

Pensonic

iBhd

Khind

AIC Display

End User

Semiconductor

Electronic

Components

Consumer

Electronics

Local:

LKT

Cosmo

Greatech

Pentamaster

Eng Technology

Numac Machine

Tool Prodelcon

Assembly

& Test

Semiconductors

& Components Electronics Sub-Assembly

& Contract Manufacturer

Consumer & Industrial

Electronics

Source: adapted from Oracle, Asia Pacific, 2002

Smartcard

modules & Semiconductor

Wearable 3D displays

42” & 50” Plasma TV

Capital

Goods

Current and future industrial products’ progression?

Use our own indigenous resources as a

competitive advantage such as Biomass to Malaysia as a small tropical developing

country like Costa Rica grow rich (increase GDP and become developed nation),

distribute wealth (social) and keep our Environmental commitment (40% reduction

in CO2 emission)?

SWOT Analysis Strengths - Our untapped Biomass feedstock

• Green Waste in urban areas (housing , highways e.g. Penang has 500 tons per day with the growing of more trees (5,000 trees) in urban areas, there will be more green waste. Though officially closed in 2002, the Jelutong landfill continues to receive 1,350 tons of C&D and green waste daily. The waste is not buried but left in the open. •Leachate in landfill can be used immediately as feedstock for biogas • Agro-farming waste – rural areas – bananas, pineapples, etc. •Food waste – Greater KL and Penang each produce 1000 tons of food waste per day • Palm oil waste from private mills Sewage sludge (toxic – copper and lead) - currently dumped into the landfill and sea. In Penang island, 50 tons per day. Singapore and China use sewage sludge to make cement for their buildings, and for energy generation.

Weakness Sustainable high-volume long-term contract of palm oil-based feedstock is controlled by big palm oil plantations

Opportunities: Food Waste into Green Chemistry and bio-solvents Green waste into Eco-pulp and paper products Waste into Bio-ethanol and bio-fuel Leachate in landfill into biogas Our biomass SMEs to expand overseas where biomass feedstock for energy is plentiful (sawdust as energy feedstock – Canada, US, Sweden, Brazil, China) Partnering with cost-effective and commercial bio-refinery companies that turn waste into bio-solvents, pulp and paper, green chemical, bio-ethanol and bio-fuel .. Euro 20m for bio-refinery and R&D in Finland.

Threats Most European and US international bio-fuel and bio-ethanol companies are only interested in cheapest sugar (not biomass) feedstock 20 cents/kilo. Large Taiwan industrial flour companies are only interested in cheapest crude banana flour 60 cents/kilo compared to RM20/kilo

So much ends up in waste

What do we do with our waste?

What a waste!!

Malaysia • 95% landfill, • 5% recycled (JSPN).. but industry says recycle is 15% (Pemandu, 4/12) • 45% is food waste

25,000 tons/day of waste is generated in Peninsular Malaysia in 2012 based on projections in the National Strategic Plan. 45% if food waste

Food Waste - we need to encourage the usage of this chemically-rich resource & source of functionalised carbon

25,000 tons/day of waste is generated in Peninsular Malaysia in 2012 based on

projections in the National Strategic Plan. (Pemandu-JSPN Waste Management Lab Report, April 2012). Malaysia generates 21,000 tons per day of which 17,000 tons are collected by local authorities (Final PEMANDU NCER C&C Lab Report, March 2012) 45-50% comprised of food waste that is dumped into the landfill (Pemandu GKL Lab Report, 2011, C&C NCER Lab Report, March 2012)

•in the UK, over 90% of the 5.7 Mt of commercial and industrial Food Waste is

discarded to landfill. 90 Mt of food waste generated every year in the EU incl. industrial and household food waste, or 179kg per capita

Thus, there is available source of functionalised carbon. Most is landfilled, and it

if isn’t landfilled, it is used for 1st generation, lower-value applications such as

compost, anaerobic digestion or animal feed.

Electricity - 670 kwh of energy is produced per ton of organic waste

Cost of Waste in Malaysia (source: Waste Mgnt Lab, April 2012 from JSPN)

Increasing amount of solid waste

- 25,000 tons/day waste generated in

Peninsular Malaysia in 2012 based on

projections in the National Strategic

Plan.

- Only an estimated of 5% recycled.

Source separation scheme ongoing but

still at early stage.

Landfills are the only disposal means in

Malaysia

- 95% waste land-filled. Around 300 sites

but only 60% in operations.

- Not more than 10 sanitary landfills have

been built (vs 22 specified in NSP).

Current treatment and disposal methods are

not environmental friendly

- Dependence on landfills will increase

CO2 emission by 50% in Peninsular

Malaysia by 2020

- Incinerators releases toxic gases like

dioxins

Current state of affairs

Urgency to move away from landfills -

• lack of areas for new landfills especially within major conurbation and corridors

• landfills increase Methane and GhG emissions causing climate change

• negative public perception on landfills

New sustainable SWM technologies are required to address environmental issues.

Emerging technologies are available and looks promising but viability needs to be verified.

Source: PEMANDU Solid Waste Management Lab (April 2012)

Business-as-usual is not sustainable

Source: JPSPN

Malaysia is currently dependent on landfills with 95% of waste

collected ending up in landfills

Source: JPSPN, 2012

State Landfills in operation

Landfills Not in operation

Total

Johor 14 23 37

Kedah 8 7 15

Kelantan 13 6 19

Melaka 2 5 7

Negeri Sembilan

7 11 18

Pahang 16 16 32

Perak 17 12 29

Perlis 1 1 2

Pulau Pinang 2 1 3

Sabah 19 2 21

Sarawak 49 14 63

Selangor 8 14 22

Terengganu 8 12 20

WP Kuala Lumpur

0 7 7

WP Labuan 1 0 1

Total 165 131 296

A world of possibilities…

Palm oil waste 15.8 Mt/y

Unripe coconut husks 5 Mt/y

Cassava starch 228 Mt/y

30 Mt/y of Agro-residues 382 t/y coffee

husks

1 Mt/y of food waste

Agro-residues 46 Mt/y

Spent coffee grounds 3 Mt/y

Orange peels 12 Mt/y

Food supply chain

residues

sugars phenols

collagen

starch

natural dyes

chitosan

cellulose

pectin

hemicellulose

waxes

films bio-adhesives

hydrogels

natural chelants

bio-solvents

chemical monomers

nanocomposites

bio-surfactants

PVC replacements

Chemicals from food waste

Liquid fuels

cosmetic waxes

solid fuels

hydrophobes

lignin

James Clark, 2011,York Univ

• PepsiCo looks to reuse plant waste

• Mar 14, 2011 6:10pm EDT CHICAGO

(Reuters) - PepsiCo Inc (PEP.N) is working on

ways to reuse waste like oat husks and orange

peels, to save money in its supply chain, in

areas such as packaging.

http://www.reuters.com/finance/stocks/overview?symbol=PEP.N

Fuels

Solvent

Bulk chemicals

Plastics

Fibres

Fine chemicals

Oils

Bio-refinery

Biomass

Not from Food Quality feedstock, instead use Food Waste

Extractables

(secondary metabolites from straw) Materials

(primary metabolites – starch, cellulose)

Bulk Chemicals

((Bio)chemical processing of bulk materials/residues)

CH

EMIC

AL

PO

TEN

TIA

L TE

CH

NO

LOG

IES

AD

DIN

G V

ALU

E

Biomass including food and agro-wastes

Benign Extraction Methods

Separation/Purification

Green Chemical Transformation

Expansion Methods

Green Chemical Modification

Composites

Selective Fermentation

Controlled Pyrolysis

Extraction Technology

(Bio)platform molecules

Green Chemistry/technology

Pressures on the Chemical Industry Across the

Lifecycle

The The Chemical industry is too dependent on traditional virgin sources of raw materials.

So instead, use food waste as the raw material

Methodology - Indicators

EPI Rank EPI

Rank

EPI

Score▼ Country

EPI

circa

2000

EPI, Most

Recent Year

Available (2010)

Percentage

Change

EPI Pilot

Trend

Rank

EPI Pilot

Trend

Score

1 76.69 Switzerland 76.2 76.7 0.51 89 2.42

2 70.37 Latvia 63.8 70.4 7.35 1 18

3 69.92 Norway 68.1 69.9 1.91 84 2.95

4 69.2 Luxembourg 68.8 69.2 0.4 106 0.26

5 69.03 Costa Rica 66 69 3.35 113 -0.52

6 69 France 62.3 69 7.62 19 11.02

7 68.92 Austria 67.9 68.9 1.11 71 4.38

8 68.9 Italy 63.2 68.9 6.37 12 11.31

9 68.82 United

Kingdom

61.2 68.8 8.73 20 11.01

9 68.82 Sweden 66.4 68.8 2.68 63 5.44

How A Tiny Central American Country Is Getting Richer And Saving The Environment • Uses 99.2% renewable energy • GDP growing for decades • Started with the disband of its military in 1948, resulting in military funds channelled instead on investment into social and environmental programs

• Transformed itself from one of the most deforested nations (29%) in the Western hemisphere to one with Forest cover 52% its area

• Costa Rica has accomplished in the past 30 years to save the environment and prosper

Malaysia EPI Rank: 25 Pilot Trend EPI Rank: 33

• Population: 28,401,017, Land Area (sq. km.): 331,235 GDP Per Capita: $13,186

• Costa Rica: EPI Rank: 5, Pilot Trend EPI Rank: 113 Population: 4,658,887, Land Area (sq. km.): 51,452, GDP Per Capita: $10,258

Countries with similar levels of performance:

• New Zealand

• Ecuador

• Germany

• Portugal

• Australia

Countries with similar trend performance, 2000-2010:

• Indonesia

• Trinidad and Tobago

• Viet Nam

• Chile

• Namibia

Source: http://epi.yale.edu/dataexplorer/countryprofiles

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=NZL&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=ECU&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=DEU&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=PRT&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=AUS&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=IDN&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=TTO&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=VNM&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=CHL&view=detail&thisind=EPI

http://www.stat.yale.edu/cgi-bin/R/cpmain?iso=NAM&view=detail&thisind=EPI

http://epi.yale.edu/dataexplorer/countryprofiles

37

Comparing performance when invested capital is low

What is Technological

Capability?

a) Routine Operating Capability:

Capability to use existing technology

b) Innovative Capability:

Capability to generate & manage change

2ND Dimension of Technological Development

Adapted from Hobday (1999). ‘Understanding innovation in electronics in Malaysia’ In Jomo, Felker & Rasiah (eds) Industrial Technology Development in Malaysia: Industry & Firm Studies, Routledge, UK)

PCB Design Testing

PCB Assembly Prototyping

PCB Fabrication

PCB Layout

Sub-System Circuit Design & Simulation

Semiconductor Packaging

ASIC/SoC Fabrication

FPGA Test and Debugging

FPGA Programming

Pre-Compliant Testing

FMEA Reliability

Testing

Functional Testing

Prototype Build and Integration

Rapid Prototyping

Kinematics Simulation

3D Design, Modeling , and

Rendering

Semiconductor Circuit Design

Market Feasibility

Test & Debugging

Software Coding

Architecture Design

Pilot Run & Mass

Production

Product Certification

Product Design (Mechanical)

Application & System Design

(Electronics) Semiconductor

IC Design

Product Testing

Mould & Tooling Design

Trial Testing

Product Design (Concept)

Internal Qual (JEDEC)

Prototype & Full Solution

Proposal

Design and full characterization

Material matrix & stress

modeling

Product & Process

Requirement

Semiconductor Packaging Design

Product Definition &

Tolerance Level

Appearance & Component Specification

FMEA

Design for Mfg. & Assy.

Design Rule Fix & Doc.


(Software)

Failure Analysis & Reliability

Testing

Pilot Run

Pilot Run

Customized Production

Machineries

Design & Development Activities in the Electronics Industry in Malaysia

IC Design Support

Front-end Design Service

Back-end Design Service

Analog IC Design Service

Digital IC Design Service

Mix-Signal IC Design Service

RF IC Design Service

Source: author’s research update in 2008 and 2010

ROUTINE OPERATING CAPABILITY IN THE ELECTRONICS

INDUSTRY

Types Of

Capability

Levels

Of Capability

Project

Management

Equipment, Tool &

die, metal stamping,

plastic moulding

Process and Production

Organisation

Product- centred

ROUTINE OPERATING CAPABILITY: THE CAPABILITY TO USE EXISTING TECHNOLOGY

BASIC

OPERATION

Level 1

Engaging prime

consultant.

Preparation of

initial project

outline.

Construction of

basic

civil works.

Simple plant

erection

Purchase

equipment

Recruitment.

Basic maintenance

but equipment

suppliers stationed

at plant.

SKD (semi-knocked down):

parts assembly, only final

assembly.

Assemble kits: dissamble

and re-assemble kits.

PPC: production planning

and control.

Organising basic process

flow. Visual testing only.

Routine QC to maintain

basic standards: in-

coming, final product

inspection, out-going

inspection.

BASIC

OPERATION

Level 2

Installation,

maintenance,

servicing,

Simple

customising of

existing

systems.

Basic plant

erection

Routine

maintenance of

tools and

equipment. Total

Preventative

Maintenance (TPM).

Total Productive

Maintenance.

Replication of

unchanging

items of

equipment.

Process flow, line

balancing.

Assemble separate parts

into complete assembly

CKD (complete knocked

down): complete assembly:

PCBA and product

assembly.

Efficiency improvement

from experience in

existing tasks. Routine

testing.

Replication of fixed

specification

Routine QC to maintain

existing standards: in-

line QC

Minor clean-up of design

to suit production or

market.

TECHNOLOGICAL CAPABILITY IN THE ELECTRONICS INDUSTRY

Types And Levels

Of Capability

Project

Management

Equipment Tool & Die, Metal Stamping, Plastic

Moulding

Process And Production

Organisation

Product- Centred

Routine

Production capability

Level 2

Installation, maintenance, servicing.

Simple customising of existing systems.

Basic plant erection.

Routine maintenance of tools and equipment.

TPM. Replication of unchanging

items of equipment.

Process flow, line balancing. CKD Efficiency improvement

from experience in existing tasks.

Routine manual testing.

Replication of fixed specifications Routine QC to maintain existing standards. Minor clean-up of design to suit production or market.

Basic innovative capability

Level 3

Systems integration.

Provide project management services to customers.

Providing customised software solutions

Repair & trouble-shoot equip problems

Copying and simple adaptation of existing designs/ specifications.

Set-up Equipment Design, Tool, Die & Mould Development. Engineering/fairly precision metal and plastic parts.

Set-up of Process, Production or Industrial Engineering Dept/s. Improved layout & debugging to optimise production. ISO9002, SPC, QCC, TQM, Do in-circuit testing, burn-in. MRP or JIT systems.

Set-up of Product Engineering, Product Design dept/s. Product design for manufacture (DFM), Cost-effective, incremental product development for local or different markets. Cosmetic and mechanical design.

TECHNOLOGICAL CAPABILITY: THE ELECTRONICS INDUSTRY

Types And Levels

Of Capability

Project

Management

Equipment Tool & Die, Metal Stamping, Plastic

Moulding


Organisation

Product- Centred

Intermediat innovative capability

Level 4

Software development. Project management of large-scale investment projects, international investments.

Develop automated equipment. Equipment Design Centre upgraded to separate firm. Mould & die design. High precision tooling, progressive metal stamping, plastic injection moulding.

Automation of processes Flexible & multi-skilled production. Business process re-engineering. Dev new process specifications. Able to transfer to production directly from R&D design or drawing.

Design Centre upgraded to separate firm.

Own product design for local or regional markets.

Electrical, PCB Chassis, Chip-on-board, Platform designs. Design for testability and debug-

DFT/DFD ISO9001 Software development Systems engineering.

Advanced innovative capability

Level 5

Projects management on a

global scale. Full turnkey

solution. Recognised training & service centres to

TNC Group, customers or

suppliers.

R&D for specifications and designs of new high precision tools, complex automated equipment or

production systems. Patents. Set-up of recognised training

institutes in precision tool & die, or precision plastic moulding

with universities.

Radical innovation in organisation.

Own-developed CIM with customers, vendors or Group.

In-depth Failure Analysis. Developing manufacturing, FA and TestCAD software tools, Patents.

Rapid prototyping, VLSI design. Package electrical design.

Substrate and piece parts design. Materials and surface analysis.

Upgraded to regional or worldwide Design Centres or world product

mandates. Providing design services to TNC

Group or customers.

INNOVATIVE CAPABILITY: THE ELECTRONICS

INDUSTRY IN MALAYSIA

Types And

Levels

Of Capability

Project

Management

Equipment

Tool & Die, Metal

Stamping, Plastic

Moulding


Organisation

Product- Centred

Research

based innovative capability

Level 6

Fast time-to-design cutting-edge and hi-prec equipment to produce latest or cutting-

edge products and components

Is among regional or global leader of CNC complex

equipment, high precision tooling, stamping, die &

mould, prototype models.

Process and software development to produce &

test high yield, miniaturised and higher

performance HDD products and chips.

Time-to-volume production.

Research into advanced material and new

specifications to produce future or cutting-edge

products.

Is a leading regional or international R&D,

product development, ASICs or software design

centre/s. R&D into new product

generations using leading-edge technology,

larger wafers, higher performance HDD &

chips. R&D into more uniform

crystal growth, improved magnetic orientation, advanced materials.

Source: Norlela Ariffin (2000). ‘Internationalisation of Innovative Capabilities: The Malaysian Electronics Industry’. PhD Dissertation, SPRU, University of Sussex. Framework is based on actual activities of firms in the Malaysian electronics industry, and adapted from Bell and Pavitt (1995).

RESEARCH-BASED CAPABILITY: THE ELECTRONICS

INDUSTRY

Greater Penang (Penang, Kedah, Perak) and Klang Valley

• The selection of the two most established locations has allowed for testing of the importance of location and industrial clustering. Penang has the highest regional distribution index for the electronics industry, an index that measures the concentration of industries based on sectoral employment, employment concentration ratio and value-added per worker. Almost one-third of the whole industry’s employment is in Penang (other concentrations of the electronics industry are in the Klang Valley and Johor).

• It would be expected that firms operating in the

Greater Penang area would have higher technological capability levels due to greater clustering and networking effects than firms in the Klang Valley.

Table 4 Statistical Results Of Factors Influencing Technological Capability Levels

Sampled Firms

Factors

All

sampled

firms

n=53

Group 1

TNC

subsidiaries

n=26

Group 2

Local

suppliers

linked to

TNC

subsidiaries

n=14

Group 3

Local

independent

firms

n=13

1 TNC parent

origin

- Chi-sq =

9.084

2 TNC-led local

origin

Local firms

Rho=.066 - Rho=.282 Rho=-.139

3a Product type Chi-sq =

14.021 Rho = .198

Chi-sq = 12.2 Rho = -.105

Chi-sq = 8.56 Rho = .073

Chi-sq = 11.51 Rho = .598**

3b Final goods or

supplier

Rho = -.1 Rho = -.247 All are

suppliers Rho = .228

4 OEM-ODM-

OBM

Rho = .267** Rho =

.504*** Rho = .728*** Rho = -.073

5 Export-

orientation

Rho = .28**

Rho = .058 Rho = .546** Rho = .398

6 Market

orientation

Chi-sq =

8.021 Rho = .117

Chi-sq =

3.369 Rho = -.201

Chi-sq = 4.472,

Rho = .546** Chi-sq = 5.146,

Rho = .494*

7 Local decision-

making

Rho =

.559*** Rho =

.614*** Rho = .8*** Rho = .428

8 Automation level Rho =

.393*** Rho =.339* Rho = .24 Rho = .649**

9 Region Rho =.084

Chi-sq = 2.28 Rho = .192

Chi-sq = 5.1* Rho = .213

Chi-sq = 5.4* Rho = -.407

10 Employee size Rho =.141

Rho = .192 Rho = .039 Rho =.31

10 Sales Group size Rho=.134

Rho = .343 Rho = .308 Rho = .236

11 Num engineer Rho = .388** Rho = .405 Rho = .535 Rho = .733**

11 % engineer Rho =

.455*** Rho = .568** Rho = .559* Rho = .221

12 Sales/

Employee

Rho = .117 Rho = .288 Rho = -.411 Rho = -.413

12 Profit Rho = .450** n.a Rho= .296 Rho = .54

Significance level: * between .05 and .1, ** between .01 and .05, *** less than .01

Based on Table 4 and data drawn from 53 firms in Greater Penang and Klang Valley interviewed.

The statistical results do show that there is a significant difference in technological capability levels between the two regions. Penang firms overall, have higher technological capability levels than those in the Klang Valley. However the differences between MNC subsidiaries in the two locations, as well as between local suppliers linked to MNC subsidiaries, and between local independent firms are not significant.

Penang and Klang Valley Goodness-of-Fit

Chi-Square df Sig.

Pearson 23.982 9 .004

Deviance 28.411 9 .001

Link function: Logit.

MNCs versus Local Firms

• MNC subsidiaries and local suppliers linked to MNC subsidiaries in Greater Penang have higher average numbers of R&D staff (85 and 25 staff, respectively) than those in the Klang Valley. But local independent firms in the Klang Valley have a higher average (43 staff) than those in Penang.

• These differences may be due to the types of product manufactured, length of operation or other factors. Even though the numbers of people are less than those in developed countries, these numbers are gradually increasing - some firms that started with three personnel in the 1970s had as many as 200 R&D staff by the late 1990s; in 2008, Intel in Penang had 1,200 staff in the Intel Design Centre.

Table 5 Average Number of R&D Staff In Firms Interviewed

Group Group 1

TNC

Subsidiaries

Group 2

Local

suppliers

linked to

TNC

subsidiaries

Group 3

Independent

firms

Total Local

Firms

Total

Region KV Penang KV Penang KV Penang KV Penang KV

2215

Penang

2295

Mean

Employee

2634

4088

93.3

481

2315

1003

1760

630

R&D

staff

60 85 4 25 43 10 33 18 47 71

72 11 38 30 56

PCB Design Testing

PCB Assembly Prototyping

PCB Fabrication

PCB Layout

Sub-System Circuit Design & Simulation

Semiconductor Packaging

ASIC/SoC Fabrication

FPGA Test and Debugging

FPGA Programming

Pre-Compliant Testing

FMEA Reliability

Testing

Functional Testing

Prototype Build and Integration

Rapid Prototyping

Kinematics Simulation

3D Design, Modeling , and

Rendering

Semiconductor Circuit Design

Market Feasibility

Test & Debugging

Software Coding

Architecture Design

Pilot Run & Mass

Production

Product Certification

Product Design (Mechanical)


(Electronics) Semiconductor

IC Design

Product Testing

Mould & Tooling Design

Trial Testing

Product Design (Concept)

Internal Qual (JEDEC)

Prototype & Full Solution

Proposal

Design and full characterization

Material matrix & stress

modeling

Product & Process

Requirement

Semiconductor Packaging Design

Product Definition &

Tolerance Level

Appearance & Component Specification

FMEA

Design for Mfg. & Assy.

Design Rule Fix & Doc.


(Software)

Failure Analysis & Reliability

Testing

Pilot Run

Pilot Run

Customized Production

Machineries

Design & Development Activities in the Electronics Industry in Greater Penang & Klang Valley

IC Design Support

Front-end Design Service

Back-end Design Service

Analog IC Design Service

Digital IC Design Service

Mix-Signal IC Design Service

RF IC Design Service

Source: author’s research update in 2008 and 2010

Figure 4 Research update in October to November 2008:

innovation audit of front-end semiconductor and electronic design centres/firms

30%

12% 15%

18%

3% 0% 0%

3%

18%

0%

5%

10%

15%

20%

25%

30%

35%

0

2

4

6

8

10

12

% o

f C

om

pan

ies

No

. of

Co

mp

anie

s

Value Chain Positions of Companies Surveyed

Source: author’s research update with Robert Tai based on MIGHT

Innovation Audit in Sept-Oct 2008

• The recruitment forecast conducted in 2008 for Design and Development staff over the next five years (2009-2014) is expected to increase. However, year 2009 was expected to experience a slight dip in recruitment, partly due to the not so favourable sales forecast due to the global financial crisis in 2008. The expected year-on-year growth is about 6%.

Figure 2: Research Update in October 2008

The types of new recruits are centred on IC design and application software and hardware engineers. There is also a strong emphasis on

non-technical related recruits as well

How long did firms take to build up technological capability in Penang and Klang Valley?

Figure 8. Mean speed (in years) to move through various technological capability

levels

Source: Derived from the research. 3.4

00

00

3.4

4.7

4.5

5.1

11.1

4.5

4.4

4.3

4.5

4.4

4.5

4.3

5.4

0 5 10 15 20 25 30

fastest speed

Process and production

organisation

Product-centred

Equipment, tooling, moulding

Project Management

master operation basic innovation intermediate innovation

advanced innovation research-based innovation

years

Types of capability

Levels of capability

Fastest Speed To Move Through

Technological Capability Levels,

Regardless of Type

Process and production

organisation Product-centred

Equipment tool & die,

stamping, moulding Project management

Start operation to entry into

electronics industry speed

Mean= 2.7, n=53

Median = 0, Mode = 0,

SD = 9.1, Min=0, max= 57

Entry into electronics industry to

master routine production speed

Mean= 3.4, n=51

Median = 3, Mode = 7, SD = 9.7, Min=0, max= 61

Master basic operation to start of

basic innovation speed

Mean = 3.2, n=51 Med = 2.8, mode = 4, SD=3.4,min=-2,

max=13.3

Mean = 4.7

Med = 3, Mode = 0, SD = 4.6, min = -.5, max =

15.6, n=34

Mean = 4.5

Med = 3, Mode = 1.1, SD = 4.5, min = -2.1, max = 18,

n=36

Mean = 5.1

Med = 4.2, Mode = 4, SD = 4.5, min = -1, max = 16.4, n=28

Mean = 11.1

Med = 11.4, Mode = 1.1, SD = 6, min = 1.1, max = 19, n=14


intermediate innovation speed

Mean = 7.6, n=43 Med = 5.7, mode = 14,

SD=5.2, min=-.8,max=18.4

Mean = 8.9

Med = 8, Mode = 8, SD = 5.6, min = 0,

max = 19, n=25

Mean = 7.7

Med = 5.8, Mode = -.5, SD = 5.4, min = -.5, max =

17.3, n=25

Mean = 9.1

Med = 8.8, Mode = 8, SD = 4.6, min = -.3, max = 18.4, n=20

Mean = 13

Med = 12, Mode = 12, SD = 7.3, min = 4.3, max = 24, n=12


advanced innovation speed

Mean = 11.9, n=19

Med = 12, mode = -.8,

SD=6.5, min=-.8,max=23.2

Mean = 14.7 Med = 16.5, Mode = 7, SD =

5.9, min = 7,

max = 23.2, n=11

Mean = 13 Med = 12, Mode = 12, SD =

7.3, min =4.3, max=24, n=12

Mean = 13.7 Med = 13.7, Mode = 8.8, SD =

3.4, min = 8.8, max = 19, n=6

Mean = 17.8 Med = 17.8, SD = 1.9, min =

16.4,

max = 19.2, n=2


research-based innovation speed

Mean = 22.1, n=2 SD=2.6, min=20.2,max=24

N=1,

Speed = 20.2

n=1,

Speed = 23.9

Start basic innovation after starting

intermediate innovation speed

Mean = 4.5, n=44

Med = 3.6, mode = 0, SD=3.4, min=0, max=14.4

Mean = 4.4

Med = 3.7, Mode = 2, SD = 3.4,

min = .5, max = 14.4, n=22

Mean = 4.3

Med = 4.4, Mode = 6, SD =

2.3, min = 0, max = 8, n=23

Mean = 4.5

Med = 3.8, Mode = 4, SD = 2.9,

min = .8, max = 10, n=18

Mean = 6

Med=6.1, Mode = 1.17, SD =

3.4, min = 1.2, max = 9, n=4


advanced innovation speed

Mean = 9, n=19 Med = 8.2, mode = 7,

SD=4.5, min=.5, max=19.2

Mean = 10.1

Med = 7.1, Mode = 5.2, SD = 5.2, min = 5.2, max = 19.2, n=9

Mean = 10

Med = 10.1, Mode = 1.3, SD = 5.1, min = 1.3, max = 15.4,

n=8

Mean = 8.9

Med = 7.8, Mode = 6.6, SD = 3.1, min = 6.6, max = 15, n=6


research-based innovation speed

Mean = 19.7, n=2 SD=5.4, min=16,max=23.5

N=1,

Speed = 11.2

n=1,

Speed = 21.9

Start intermediate innovation after

starting advanced innovation speed

Mean = 4.5, n=19 Med = 4.4, mode = 0,

SD=2.7, min=0, max=10

Mean = 4.3

Med = 3.9, Mode = 2, SD = 2.4, min = 2,

max = 10, n=9

Mean = 5.4

Med = 6, Mode = 6, SD = 3.8, min =.5,

max = 13.6, n=9

Mean = 5.7

Med = 5.3, Mode = .2, SD = 3.6, min = .2, max = 11, n=6

n=1,

Speed = 4.4

Start intermediate innovation after

starting research-based innovation

speed

Mean = 16.9, n=2 SD=4.4, min=13.8,max=20

N=1

Speed = 9.2

n=1

Speed = 20.5

Start advanced innovation after

starting research-based innovation

speed

Mean = 9.1, n=2

SD=1.3, min=8.2,max=10

N=1

Speed = 5.3

n=1

Speed = 6.9

• Fifthly, an examination of the length of time at which firms remain at their maximum innovative capability level shows that, on the average, this rate decreases as firms reach higher maximum levels – see Figure 9. At the research-based innovative level, this is not surprising as only two firms have reached this level since late 1998. The number and proportion of firms that have remained at their maximum levels for different time length intervals, rather than average time length, are given in Table 6. This table shows that, at the lower innovative capability levels, there is a higher proportion of firms that have remained there longer than the proportion of firms at the higher levels. From Table 6, 10 of 35 firms (29%) that are ‘stuck’ at the basic and intermediate levels have remained there for six to 13 years. Figure 9. Average rates (in years) that firms remain ‘stuck’ at the maximum

technological capability level reached

Maximum Technological Capability Reached

Research-

based

innovation

Advanced

innovation

Intermediate

innovation

basic

innovation

Num

ber o

f yea

rs

7

6

5

4

3

2

1

0

Table 6. Number of firms that remain at different maximum technological capability

levels by length of time spent at that level Basic innovative

level

Intermediate

innovative level

Advanced

innovative level

Research-based

innovation

< 2 years 1 6 8 2

2-3 years 0 3 1 0

4-5 years 4 8 6 0

6-7 years 2 4 1 0

8-13 years 1

(12%)

3

(11%)

0

(0%)

0

(0%)

Num of Firms at

Maximum Capability

Level

8

(15%)

27

(50%)

16

(30%)

2

(4%)

Sources: Drawn from timeline data of 53 firms interviewed

Implications for policy planning • The data collected here covers a span of 40 years in the development of the Malaysian electronics industry. So

far, significant MNC-linked technological learning has occurred during this period. But it does not imply that this process will continue through subsequent phases of the industry’s development. It may do so. But, it may be that there are limits to the learning role played by MNCs, and that other types of firms and other types of learning mechanisms will have to play key roles in the future.

• The plan to tranform the Malaysian economy into an innovation-led, high-income economy should not only

focus on efforts to bring in new MNCs, but also to promote and support the innovative technological development of existing MNC subsidiaries and MNC design centres. Serious attention should also be given to foster a larger pool of indigenous innovative capabilities as in the cases of Taiwan and Korea. The same attention that has been given to attracting and sustaining foreign MNCs over the last 38 years should also be given to promoting local innovative firms. Local innovative firms should be recognised and given tangible support to facilitate their growth into global firms. Efforts to promote local innovative firms have started with the SME Innovation Award which gives a RM1 million cash prize to the most innovative SME and the introduction of 1-innoCERT innovation certification. In Korea, the equivalent of the 1-innoCERT innovation certification - INNOBIZ - provides technology funding to certified Korean SMEs, comprising a government guarantee (about 85%), a 75% refund of product development expenses (to a maximum value of USD500,000), longer loan periods and lower interest rates. Seven percent of Korean government procurement is also sourced from certified innovative companies.

• It is also important to distinguish between two fundamentally different dimensions of technological

development: movement through increasingly ‘advanced’ and complex products and processes on the one hand and, on the other, movement through increasingly creative roles in connection with those product/process technologies – e.g., from their basic operation and use through various kinds of design and engineering to differing ‘depths’ of R&D.

• Progress along these two dimensions involves the creation of very different kinds of resources and the use of

different learning mechanisms. So, while the Penang state government may have interests in accelerating both types of progress, different measures will be required in each case. A good move would be to invite established IC design apprenticeship training centres to open in Penang, i.e. a collaboration with SHRDC on their IC design tools and training facilities at MIMs and ICmic’s Academy.

---- EXPORT MARKET ---- DOMESTIC MARKET---

Global Electronics Malaysian Electronics Industry

Industry

Other

Foreign Firms

Key: The arrows represent linkages between the groups of firms

Source: derived from the research

Foreign

TNC

parents

Foreign

subsidiaries

Group 1

Local

linkage firms

Group 2

Foreign Firms Local

independent firms

Group 3

1. Inter-Firm Knowledge Flows &

Learning Links:

LINKS CENTRED ON

MARKET

TRANSACTIONS IN

GOODS AND

SERVICES

KNOWLEDGE LINKS

Existing Technology Innovation Links

(Routine Production)

CAPABILITY

- USING

LINKS

MP-Links

Marketing/

Production links, interactions between firms

is a purely marketing

relationship involving the

sale of goods and services

from the use of existing

production capabilities,

I-Link

Innovation links, interaction is the source of

innovation. Here firms

already have innovative

technological capabilities,

and they collaborate in

using those to execute

CAPABILITY

-BUILDING

LINKS

(LEARNING

LINKS)

LP-Link

Learning for

Production links are used by firms to

create or enhance basic

production capability.

and/or to master specific

managerial and

organisational practices.

LI-Link

Learning for

Innovation links,

firms build up new basic

and intermediate level

innovative capabilities.

Typology of Inter-Firm Knowledge Flows

Measure of Inter-Firm Knowledge Flows

MP-links: Links centred on market

transactions

Linkage

Rank

2

LP-links: Links centred on Knowledge

flows to learn existing technology

3

LI-links: Links centred on Knowledge

flows to learn to innovate

4

I-links: Knowledge links in

collaborations in innovation

5

2003/2005 MIGHT Innovation Audit – Linkages given highest weightage to Innovation (6 weight)

“Innovation must become a way of life, a norm. Only then will countries be able to compete against the best in the world.”

YAB Dato’ Seri Abdullah Haji Ahmad Badawi Prime Minister of Malaysia

Patron of MIGHT

© MIGHT 2008 Proprietary & Confidential 63

Degree of Effectiveness in Practice

De

gre

e o

f A

wa

ren

ess o

f T

ech

no

log

y

Strategic

Reactive

Creative

Passive

OVERALL SCATTER PLOT FOR ALL 81 LEADING FIRMS SURVEYED

1) Awareness

2) Search

3) Building Core Competencies

4) Technology Strategy

5) Assessing & Selecting Technology

6) Acquiring Technology

7) Implementing Technology

8) Learning

9) Linking to External Sources

Source: 2003/2005 IMIGHT Innovation Capability Survey for EPU

Innovation Capability Along 9 Dimensions

• Short Courses

• Graduate Enhancement

Program

•EDA labs

• Short Courses

Software

Engineer

• Application Software

• Embedded Software

• Packaging Prototyping Centre

• Process Innovation

• Graduate Enhanmentment Program

• Testing Centre

• Short Courses

• Graduate Enhancement Program

• Prototype

•MOCCIS, MIMOS

• PCB Protototyping

Centre

•Graduate

Enhancement Program

• Short Courses

Low Speed

Multi Layered

High Speed

Malaysia Institute Of Microsystems (MIMs) – Programs

Packaging & Testing

PCB Design

Design

Analog Digital

Mixed

Signal

SOC

Semiconductor

Packaging

Testing

IC Chip

PCB Testing

RF

• Short Courses

• Graduate Enhancement

Program

• Short Courses

• Graduate Enhancement Program

•Embedded System Development

lab

MIMs

•Seminar/Symposiums

(working population)

•Schools

•Technology

awareness

•Competition

Voice of Industry

•Graduate Enhancing

Program

•Continous Professional

Education (CPE)

•Short courses

Education & Training

•EDA tools

•Prototype facilities link (e.g:

Fabs, Packaging & PCB)

•Test facilities

•Access through SMIDEC

grant

Tools & Technology

•Start up OJT

• Incubation centres

• International networking &

market access

Start up OJT Centre

•Competencies &

capabilities

•R&D directory

•Supply chain

•Government &

agencies directory

•Funding & incentives

•Technologies guide

•Benchmarking

database

•IPs Database Access

Knowledge Library

Innovation

& Creativity

Resources

Competencies &

Capabilities

Development

Information

Dissemination

Increase

Awareness

•Industry – research/academic

collaboration

•Innovation development

•Universities

•Design houses

Research & Development

SHRDC

SHRDC

SHRDC

SHRDC

Malaysia Institute Of Microsystems (MIMs) – Model

Participating companies in education and training

AIC Semiconductor Sdn. Bhd. *

Alps Electric (Malaysia) Sdn Bhd

AMD Spansion Penang *

Carsem Industries (M) Sdn Bhd *

Fairchild Semiconductor (M) Sdn Bhd *

Flextronics (M) Sdn Bhd *

Pullstreme Design Systems Sdn Bhd *

Freescale Semiconductor (M) Sdn Bhd

*

Intel Microelectronics (M) Sdn Bhd *

IRIS Technologies Sdn Bhd

Jaalaa Malaysia Sdn Bhd*

My MS*

Avago *

Transdist*

Keyasic*

Agilent*

Infineon *

Metronic Sdn Bhd

Test Tooling Solutions *

Motorola Technology Sdn Bhd

National Semiconductor Sdn Bhd *

Onsemiconductor (M) Sdn Bhd *

Pioneer Technology (M) Sdn.Bhd

Renesas (Semiconductor) Malaysia Sdn Bhd *

Sires Labs Sdn Bhd*,

Sony EMCS (M) Sdn Bhd

Spansion (M) Sdn Bhd *

Symmid Corporation Sdn Bhd *

Texas Intruments (M) Sdn Bhd *

Toshiba Electronic Malaysia

Altera*

MIMOS*

Uchi Opto*

And many more

New MIMs Program: Enhanced INSEP (~14 months)

• Industry certification is provided:

– : Analog Chip Design – Certification from Toppan Moore Japan

– : Piping System Design (Oil & Gas) – Society of Piping Engineers and Designers (SPED USA)

– : PCB Design – Certified Interconnect Designer (IPC USA)

– : Industrial Automation – Certified Automation Professional (Instrumentation Systems and Automation (ISA) USA) Pending

IRPA-PR0075 The Development and Production of Advance Semiconductor Packaging On-Site Research work conducted at AIC Semiconductor (www.aicsemicon.com) beginning Dec 2006 for 1 year.

http://www.um.edu.my/

http://www.sirim-qas.com.my/

70

Proposed Qual Vehicle Definition

* TBD – based on AICS popular customer request

To develop most popular QFN (*TBD) body size lead frame (0.5mm pitch, 0.2mm lead frame thickness).

Using existing AICS lead frame outline that is compatible with existing platform setup

Small top die, no spacer & 2 die stack.

Illustration of Potential Package

Configuration

Applicable for products such as

cell phones, PDAs, digital cameras

and audio players with smaller and

thinner overall system

technologies.

Target Applications

Advanced 3-D Package

71

Benchmark shows that for QFN packages smaller than 3 mm x 3 mm, Saw singulation is used

more widely and the package height is in the range of 0.85 mm to 1.00 mm. There are 50%

companies engaged in these QFN packages smaller than 3 mm x 3 mm from the benchmark.

Smaller than 3x3

capability

Punch

Singulation

Saw

Singulation

Package height

(mm)

Amkor 0.90

ASAT 0.75 / 0.90

ASE Chung Li 0.90

ASE Kaohsiung 0.90

ASE Korea - 0.90

ASE Malaysia 0.90

Carsem 0.90

Cypress - - -

Fairchild Semi 1.00

Infineon 0.60

Intersil - - -

Maxim - - -

National Semiconductor 0.80

NEC - - -

ON Semiconductor 0.55 / 0.90

Philips Semiconductor 0.85

Renesas 1.00

ROHM 0.95

STMicroelectronics 1.00

Texas Instruments 0.80 / 0.90

Toshiba -

Name

* ASE is one company even though the benchmark shows four.

72

Stack Die QFN (based on AICS standard QFN flow

Wafer

Backgrind Wafer Mount Wafer Saw

1st Die

Attach

2nd Die

Attach 2nd Curing

3rd Optical

Reject

Mapping

Detaping Laser

Marking

Post Mold

Cure

2nd Optical

QA Gate

1st Curing

Molding

Wire Bonding

C-SAM

Monitor

LF Bar

Coding

Strip Mount Pick & Place Package Saw

END OF LINE

FRONT OF LINE

TOP DIE BTM DIE

BTM DIE

TOP DIE BTM DIE

TOP DIE BTM DIE

TOP DIE BTM DIE

TOP DIE BTM DIE

Plating

(optional)

3rd Optical

QA Gate

4th Optical

QA Gate

73

Proposed Internal Qual Reliability Test Plan

Precondition Stress Following StressSample Size

(Lots/ Parts)Procedure Readouts Pass/ Fail Criteria

Precondition MSL L3 Temp Cycle Condition B MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, (-55 ~125°C) Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, Temp cycle per JESD22 2) Post 3X reflow (transducer freq >50MHz)

-A104B, Soak Mode 1 3) 500, 1000 cyc

Precondition MSL L3 Temp Cycle Condition C MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, (-65 ~150°C) Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, Temp cycle per JESD22 2) Post 3X reflow (transducer freq >50MHz)

-A104B, Soak Mode 1 3) 500, 1000 cyc

Precondition MSL L3 Biased HAST/ 5v MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, 130°C/85%RH, 33.3psia, Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, 96 Hours Biased HAST per 2) Post 3X reflow (transducer freq >50MHz)

JESD22-A101-B 3) 96, 168 hrs

Precondition MSL L3 Biased PCT/ 5v MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, 121°C/100%RH, 33.3psia, Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, 96 Hours 2) Post 3X reflow (transducer freq >50MHz)

3) 96, 168 hrs

Precondition MSL L3 Biased 85°C/85%RH MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, 1000 hours Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, 2) Post 3X reflow (transducer freq >50MHz)

3) 500, 1000 hrs

Precondition MSL L3 HTST MSL L3 per J-STD-020B 1)%weight gain No fails at O/S test @ 25°C

192hr @ 30°C/60%RH, 150°C Precon per JESD22-A113 Post Soak No delam at SAT inspect

255+5/-0 C Reflow 3X, 1000 hours 2) Post 3X reflow (transducer freq >50MHz)

3) 500, 1000 cyc

1

3/77

2

3/77

3

3/77

4

3/77

5

3/77

6

3/77

Advanced 3-D Package Minimum Product Requirement

• Spin out from AIC Semiconductor :

– Device Semiconductor (won “Green Technology” SME Innovation Award in 2010) – used semiconductor process manufacturing technology to develop low-cost LED array to design cost-effective LED lighting

75

Technology Movement Market Requirement

ELECTRONICS SOFTWARE

MECHANICAL

PRODUCTS ARE DRIVEN BY WHAT’S INSIDE

• Developing in-house

Video & Tuner Board

• Unique image solution

using OPLUS processor

• Development for mechanical chassis,

mounting and assembly

• Firmware design for

display features &

OSD control support

76

A) Hardware Design

1. Image Processor & ADC

2. Inverter Design

3. PCB design & layout

4. Power Supply Design

5. Digital Tuning Receiver System (ATSC, DVB-T)

6. IR Transmitter Design

B) Software Development

1. Image Processing

2. OSD Control for user interface

3. Memory Management

4. Communication Management

5. Power Management

6. Remote Control development

C) Mechanical Design

1. Industrial Design

2. Conceptual Design

3. Mechanical Design Construction & Evaluation

4. Mechanical hazard testing

5. Ergonomic Design and Testing

6. Graphic Design

D) Safety Approvals, Testing & Failure Analysis

1. Safety approval on worldwide requirement

2. TCO 03 (Environment Management System)

3. Beta test/ Field Test

4. Reliability Test

5. Failure Mode Analysis

77

Product Development Flow

Industrial Design

With Sales & ID firms in

Export Markets

ID by DMEC

(Korea)

Conceptual design

Mechanical

Design Electronics/ Hardware

Design

Prototype

Material & Parts selection & approval

Gerber file design

for PCB

Handmade prototypes by local suppliers:

APM, CTM, Formosa

PCB Design PCB Fabrication

by local supplier APC

PCB Assembly by local supplier Asteria

Tooling Design 3D For Metal

& Plastic Parts Metal Stamping

& Injection Molding by Local Suppliers

CTM & Jotech

System Integration

Product Evaluation & Testing

Product Assembly & Testing

Test Equipment - Design Functional Jigs

Safety Certification To meet worldwide requirements: UL, CSA, CE, FCC, VCCI, MIC, SIRIM

*Activities by D&D (AICM) in Yellow boxes,

In blue box, by Production

78

Project Planning

Product Design and Development

Internal Verification And Validation

Product Review

Production Documentation

R&D Signs Off

Production Pilot Run 1

Production Pilot Run 2

•Create Specification •Resourcesallocation: Manpower, Budget

•Product design (Benchmark) •Prototype building •Design review •Test and evaluation

Verification and validation

•Marketing Approval •QA approval •Manufacturing review

•Safety Certification for World-Wide market •Reliability and Beta Test

•BOM •IQC/OQC check •Production Training •Approved Parts Specs •Approved Vendor List

•Material Procurement •Line Setup •Production pilot run •Pilot run review •Related Testing

R&D sign-off and hand-over to Production Department

Design & Development Process Flow

Product Safety Certification/ Type Approval

Item:D

Item:A,B,C

Item:D

Item:A,B,C

80

19” AD Board (Monitor) 19” TV Board (Monitor)

42” & 50” AD & TV Board (Plasma)

Intel Digital TV Platform/ Oplus IC

81

System solution design

Engineering design

Tools & mould fabrication

Plastic injection molding and finishing

PCB Assembly and testing

Contract manufacturing

Surface mount facilities access

//xeon/../../../Moldex3DDemo/SampleProjects/Solid/solid-01/Solid-01.m3j

ANALYSIS FROM 1ST BATCH OF INNOVATIVE SMES

2010 SME INNOVATION AWARD

INNOBIZ-certification in Korea

Source: Innobiz, Korea (2009) -Briefing by MIGHT for 25th November 2010 on 1innoCERT

14,626 15,063

2008 2/09

3,500

84

Korea’s Strategy : Recognise (Certify) & Foster Innovative SMEs into

Global Blue-Chip Companies

Technology Fund : 85-95% government guarantee, lower interest rate, longer loan period

Tax Deduction for R&D manpower salary,

utilities & equipment

Public procurement for SME Innovative products , etc.

Source : KIBO Annual Report 2009

IMPACT of Innovative SMEs vs Conventional SMEs

(based on Korean experience)

Higher Operating Margin

( 4.9 times)

More Jobs Creation

( 2.9 times) Higher R&D Investment

(3.5 times)

Higher Added Value

(4.9 times)

Higher Growth

(6.9 times)

1st Batch (June 2010) in Malaysia:

1-innoCERT certified companies = 65

-Brief by MIGHT for 25th November 2010

0

200

400

600

800

1000

1200

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GDP (USD Billions)

Malaysia

Korea

Singapore

Taiwan



Impact to GDP after Financial Crisis -

46% of Korea’s GDP is contributed by SMEs


2010 SME Innovation Award 1st Batch (1st June 2010)

66

5

1-innoCert www.1-innocert.my

Online Registration Status By Sector

(1st Batch: Feb 25 – March 30 2010)

http://www.1-innocert.my/



How Close is Online Self-Assessment Scores vs On-Site Audited Scores?

1-INNOCERT WITH TECHNOLOGY INNOVATION RATING For Each Certified Company (Valid For 2 Years)

AUDITED SCORES

TECHNOLOGY INNOVATION RATING

71 companies audited for 2010 SME Innovation Award

1-innoCERT CERTIFIED 66

Over 900-1,000 AAA 5

Over 800-900 AA 34

700-800 A 27

<700 NOT CERTIFIED 5

Over 600-699 BBB 4

Over 500-600 BB 0

Over 400-500 B 0

Over 300-400 CCC 1

Over 200-300 CC 0

Over 100-200 C 0

0-100 D 0

Survey Sector & SME Innovation Award Category

Certified Audited Survey Sectors: Award Categories: Audited Certified

5 6 Environment

Renewable Energy

Green

Green Tech & Energy

Efficiency

11 9

Halal 4 3

5 6 Professional Design Packaging & Design 5 4

3 3 Agriculture Technology (Agriculture

& Biotech Sector)

4 4

6 8 Biotech

26 27 Manufacturing Technology

(Manufacturing Sector)

24 23

11 11 Non-Manufacturing Technology (Services

Sector)

23 23

9 9 Software

1 1 Construction

66 71 71 66

2010 SME Innovation Award:

1st batch 1-innoCERT Audit Result from 71 audited companies (70

SMEs, 1 LLC), Average Score = 803.93 / 1000

300250200150100

20

15

10

5

0320280240200160120

16

12

8

4

0

280240200160120

20

15

10

5

022020018016014012010080

16

12

8

4

0

Innovation Ability

Fre

qu

en

cy

Commercialization Ability

Management of Innovation Outcome & Result of Innovation

Mean 220.0

StDev 44.42

N 71

Innovation Ability

Mean 241.0

StDev 37.24

N 71

Commercialization Ability

Mean 201.9

StDev 43.34

N 71

Management of Innovation

Mean 141.8

StDev 30.06

N 71

Outcome & Result of Innovation

Histogram of Innovation A, Commercializ, Management o, Outcome & ReNormal

2010 SME Innovation Award : 1st Batch 1-innoCERT Onsite Audit Results from 71 audited companies by Survey Sector

Manufacturing has highest AA and A

Chi-Square Tests 38.559, p=0.092 (significant)

2010 SME Innovation Award

1st Batch 1-innoCERT Onsite Audit Results

2010 SME Innovation Award: 1st Batch 1-innoCERT Onsite Audit Results

from 71 audited companies by Award Category

Manufacturing Award Category has highest AA and A

2010 SME Innovation Award:

1st Batch 1-innoCERT Onsite Audit Results

Impact Analysis

Appraisal of Innovation Policy Measures to Foster

Innovative SMEs

(Based on Korean & Malaysian experiences)

99

R&D Budget to Promote Innovative SMEs

101

Effectiveness of Innovation Policy Measures for SMEs

102

Effectiveness of Innovation Policy Measures for SMEs

103

Impact of Innovative SMEs: Added Value

An Innovative SME has 5 times the value add of a conventional SME; And 6.9

times the growth rate!

Source: Economic Impacts of Innovative SMEs and Effective Promotion Strategies, 2009

104

Impact of Innovative SMEs:

Added Value, Ratio to GDP & Employment


105

Innovative SMEs yields 3-4 times better performance in Job Creation,

Revenues and R&D investments.

Performance of Innovative SMEs

Source: Economic Impacts of Innovative SMEs and Effective Promotion Strategies

106

Performance of Innovative SMEs


Using the OECD Oslo Manual

(Innovation Assessment)

to develop and operationalise Innovation Scoring & Rating System for

Enterprises www.1-innocert.my

By Dr Norlela Ariffin [email protected]

[email protected] Senior Vice President

Excellent Spring Sdn Bhd






108

The Innovation Scoring & Rating System

Criteria &

Certification Process

Dr Norlela Ariffin, ISTIC 2011

METHODOLOGY – Background

1nnoCERT adapts Korea’s Innobiz’s

Technology Innovation Evaluation System

to Recognise, Certify & Foster Technologically Innovative SMEs

(however, 1-innoCERT is open to all companies incorporated in Malaysia)

Singapore (i-SPRING) has similar Innovation Certification

i-Class (Innovation-Class)

109 Dr Norlela Ariffin, ISTIC 2011

110

Definition of SMEs in Korea


Definition of SMEs in Malaysia:

99.2% of registered companies are SMEs,

78.4% of SMEs are Micro-Enterprises


TECHNOLOGY INNOVATION SCORING & RATING SYSTEM

TECHNOLOGY INNOVATION EVALUATION

SYSTEM:

- based on OECD (2005) OSLO Manual

V3 which accommodates service

industries & non-technological

innovation:

1. Product innovation (goods and services)

2. Process innovation (in making or supplying

goods and services)

3. Marketing innovation (first use of methods

to influence demand)

4. Organisational innovation ( in specific

domains of business)


Degrees of Novelty • new to the firm.

• new to the market (firm and competitors)

• new to the world (optional for surveys)

• radical or disruptive innovation (optional but impractical)

Definitions of Innovation

• An innovation is the implementation of a new or significantly improved

product (good or service), or process, a new marketing method, or a

new organisational method in business practices, workplace

organisation or external relations.


Innovation Activities

• All scientific, technological, organisational, financial and commercial steps which actually, or are intended to, lead to the implementation of innovations.

• Some innovation activities are themselves innovative, others are not novel activities but are necessary for the implementation of innovations.

• Innovation activities also include R&D that is not directly related to the development of a specific innovation.


Experience in Korea: INNOBIZ-certification

Source: Innobiz, Korea (2009)

14,626 15,063

2008 2/09

3,500


117

Korea’s Strategy : Recognise (Certify) & Foster Innovative SMEs into

Global Blue-Chip Companies

Technology Fund : 85-95% government guarantee, lower interest rate, longer loan period

Tax Deduction for R&D manpower salary,

utilities & equipment

Public procurement for SME Innovative products , etc.


Source : KIBO Annual Report 2009

IMPACT of Innovative SMEs vs Conventional SMEs

(based on Korean experience)

Higher Operating Margin

( 4.9 times)

More Jobs Creation

( 2.9 times) Higher R&D Investment

(3.5 times)

Higher Added Value

(4.9 times)

Higher Growth

(6.9 times)

1st Batch (June 2010) in Malaysia:

1-innoCERT certified companies = 65


0

200

400

600

800

1000

1200

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GDP (USD Billions)

Malaysia

Korea

Singapore

Taiwan



Impact to GDP after Financial Crisis -

46% of Korea’s GDP is contributed by SMEs



1-Innovation Certification for Enterprise Rating & Transformation

www.1-innocert.my

Malaysia’s Experience Using the Innovation Scoring and Rating System





11/7/2012 122

1-innoCERT

Global Company

Online Innovation Score

Onsite Audit – Innovation Rating Index

Min =700/1000

Min = A/AAA

The Objective – in Malaysia

3rd Step (Optional): Pre-Certification

Coaching for those who does not meet

minimum requirement

2nd Step:

Onsite Audit by registered

Innovation Auditors comprising of

Innovation Experts & Domain Experts

1st Step:

Online Innovation Self-Assessment

1) 2011: RM 1m Cash Prize to Most Innovative SME + RM200,000 per sector :

PENDING OPERATIONALISATION OF

‘Green Lane Policy’ : 2) Fiscal incentive: Lower Income Tax

for founders & knowledge workers 3) Preferential access to Soft Loans, Credit Guarantees,

Grants 4) Preferential access to Government

procurement 5) Innovation Coaching

Fast Track or ‘Green

Lane’ Policy

Privileges

Benchmarking Audit & Certification Fees (for 2nd Batch Applicants in September 2010)

No Item Organisation

Innobiz Korea

MIGHT 1-innoCERT

SIRIM Jab Standard

I-Class Innovation Class Singapore

2nd Batch proposal

Registration 360,000 won (RM 9K)

Online registration = FREE

RM 500 -1000 Online registration = FREE

Fees 600,000 won – 1,200.000 won (18K-36K)

Audit Fees RM 3k

ISO 9001:2008 Assessment till Audit about RM24-35K Awareness Program – RM 10 -12K Documentation – RM 15-25K Internal Audit – RM 10 – 15K

3500 The application fee for both single and integrated assessments is $2000. The application fee covers one day of site visit. The fee may vary with the number of extra site visit days. The fee chargeable for each extra day of site visit is $1,000 per day For new applicants of SQC who achieved the certification, an additional certification fee of $3,000 is chargeable after certification. This does not apply to SQC renewal applicants.

Onsite Audit Fees RM5k

Audit Fees n/a n/a 600

Request for Re- Certification

n/a n/a 100 Onsite Audit Fees RM5k

Fees for Re-Audit or Additional Audit

n/a n/a 600 RM3k within 6 month


INNOVATION SCORING & RATING PROCESS


126

Online Self Assessment Score Cards Overview

1 2

3 4

1 2

3 4

1

2 3 4

Total of 8 Sectors

Software Manufacturing

Biotech

Common Innovation Score Card (Total of 1,000 Marks)

E.g., Biotech Sectoral Score Card 1 of 4

E.g., Biotech Questionnaires (Total of

56 Questions)


127

Common Score Distribution Table for the Technology Innovation System Assessment Index

Category Details No. of

Questions Score

Evaluation Results

Remarks

Technology Innovation Ability

R&D Activity Index 2 50

Technology Innovation System 6 69

Technology Innovation Administration 2 31

Technology Accumulation System 5 94

Technology Analysis Ability 4 56

Total 19 300

Technology Commercialization Ability

Ability to develop products using technologies

5 111

Ability to manufacture using technologies 7 81

Marketing abilities 9 108

Total 21 300

Technology Innovation Management Ability

Management's ability to innovate 5 90

Ability to respond to changes in circumstances

4 75

CEO's sense of value 2 35

Total 11 200

Technology Innovation Results

Outcome of the technology competitiveness progress

2 50

Outcome of technology management 9 110

Outcome of technology achievement (estimates)

5 40

Total 16 200

Grand Total : 67 1000

Assessor's Opinion :

Common Innovation Score Card


128

Biotech Software Environment Manufacturing

Category Details Scores Applicable

Sections Scores

Applicable Sections

Scores Applicable

Sections Scores

Applicable Sections


R&D Activity Index 50 √ 50 √ 42 √ 50 √

Technology Innovation System 69 √ 85 √ 46 √ 85 √

Technology Innovation Administration 31 √ 30 √ 42 √ - X

Technology Accumulation System 94 √ 89 √ 76 √ 105 √

Technology Analysis Ability 56 √ 46 √ 44 √ 60 √

Total 300 300 250 300


Ability to develop products using technologies 111 √ 128 √ 87 √ 90 √

Ability to manufacture using technologies 81 √ 22 √ 120 √ 130 √

Marketing abilities 108 √ 150 √ 93 √ 80 √

Total 300 300 300 300


Management's ability to innovate 90 √ 91 √ 110 √ 91 √

Ability to respond to changes in circumstances 75 √ 74 √ 100 √ 74 √

CEO's sense of value 35 √ 35 √ 40 √ 35 √

Total 200 200 250 200


Outcome of the technology competitiveness progress 50 √ 56 √ 50 √ 50 √

Outcome of technology management 110 √ 88 √ 110 √ 110 √

Outcome of technology achievement (estimates) 40 √ 56 √ 40 √ 40 √

Total 200 200 200 200

Grand Total : 1000 1000 1000 1000

1st 4 Sectors Score Weightages


129

Agriculture Construction Non-

Manufacturing Professional

Design

Category Details Scores Applicable

Sections Scores

Applicable Sections

Scores Applicable

Sections Scores

Applicable Sections


R&D Activity Index 40 √ 42 √ 32 √ 50 √

Technology Innovation System 66 √ 66 √ 53 √ 82 √

Technology Innovation Administration - X - X - X - X

Technology Accumulation System 84 √ 82 √ 67 √ 104 √

Technology Analysis Ability 60 √ 60 √ 48 √ 64 √

Total 250 250 200 300


Ability to develop products using technologies 52 √ 81 √ 77 √ 67 √

Ability to manufacture using technologies 45 √ 113 √ 44 √ 17 √

Marketing abilities 103 √ 106 √ 129 √ 166 √

Total 200 300 250 250


Management's ability to innovate 136 √ 112 √ 136 √ 113 √

Ability to respond to changes in circumstances 111 √ 93 √ 111 √ 93 √

CEO's sense of value 53 √ 45 √ 53 √ 44 √

Total 300 250 300 250


Outcome of the technology competitiveness progress 63 √ 61 √ 61 √ 50 √

Outcome of technology management 152 √ 99 √ 143 √ 110 √

Outcome of technology achievement (estimates) 35 √ 40 √ 46 √ 40 √

Total 250 200 250 200

Grand Total : 1000 1000 1000 1000

2nd 4 Sectors Score Weightages


130

CATERGORY I : TECHNOLOGY INNOVATION CAPABILIY (BIOTECH) Detailed Item Calculation Table

Medium Category Small Category Judgement Mark

Allotment

Evaluation Results 5 4 3 2 1 A B C D E

Marks Conversion*

1. R&D Activity Index

1.1 Investment Status Investment Ratio 30 1.2 Technology Development Manpower Ratio of Technology Development Manpower 20

Sub-Total 2 Items 50

2. System of Technology Innovation

2.1 R&D Organization management and control Is there an exclusive R&D organization 17

Standard of creative development environment 13

Control of R&D personnel 11 Record of conducting Government research projects 9

2.2 Collaborative relationships with external technology institutions

Collaborative research with Research Institutes 11

What is the form of collaboration 8


3. Management of Technology Innovation

3.1 Technology Innovation Performance Capability Technology Innovation Performance Capability 16

3.2 Capability to supplement their technology Technology development manpower education system 15


4. Technology Accumulation System

4.1 Can they get research equipments easily if not easily attainable, can they fabricate themselves. 15

4.2 Quality of manpower Capability of R&D personnel based on their personal history 18

Capability of R&D personnel based on their research records 13

4.3 Actual record of technology development and commercialization

Actual record of technology development and commercialization 34

4.4 Technology retention and application system Technology retention and application system 14


5. Technology Analysis Capability

5.1 External environment analysis External environment analysis 14 5.2 Medium and long term strategy setup Medium to long term development strategy for technology development 14

5.3 Analysis of internal resources analyse internal resources 14

Analyse marketability of the technologies possessed 14

Sub-Total 4 Items 56 Grand Total : 9 items 300

* Conversion Formula = Mark Allotment X (Eval. Results / 5 Marks)

E.g. of a Sectoral Score Card For Biotech


131

Conceptual

Overview

(4 Criteria /

Index)


Conceptual View of Assessment Items

R&D Activity Index •R&D Investment status

•R&D Human Resources

.

Technology Innovation Systems

• R&D organization Management • Cooperative Relationship with external technology institutions

Technology Innovation

Administration

• Ability to conduct Technology Innovation •Ability to supplement technology

Technology Accumulation

System

• Ability to secure research equipment • Quality of Human resources • Records of Technology Development and Commercilazation • Technology accumulation & utilization System

Technology Analysis Capability

• External Environment Analysis

• Medium-long term strategy setup • Analysis of internal resources

1st Criteria/Index: Technological Innovation Ability

133

I. TECHNOLOGY INNOVATION ABILITY R&D Activity Indices

1 1.1.1 R&D Investment Ratio (if the enterprise is younger than 2 years, use last year's record) 2 1.2.1 What is the yearly average R&D Manpower Ratio against the total employee for the last 2 years?

Technology Innovation System

3 2.1.1 Is there an organization (department) in charge of the major role of R&D in the operation? (i.e., Does the R&D department drives the technology development in the enterprise?)

4 2.1.2 What is the Level of creative environment being setup at the R&D organization 5 2.1.3 Check the items below with regards to Technical staff management system. 6 2.1.4 How many projects have been completed with the support from the Government for R&D funding for the last 3 years?

7 2.2.1 How may projects have been completed for the last 2 years in joint/contract/cooperate research or advisory work with outside research institutions or university related to commercialization of technology?

8 2.2.2 What are the forms of R&D being carried out in collaboration with external institution or university? Technology Innovation Administration

9 3.1.1 The ability to conduct technology innovation (either in-house or externally) in order to gain new businesses successfully?

10 3.2.1 How many actual training hours was conducted for the last two years, per ONE(1) R&D staff internally/externally. Technology Accumulation System

11 4.1.1 Is there a system to secure the technical equipment established, and are they in working order? 12 4.2.1 What is the career history of existing R&D staffs, in relation to the fields of R&D currently being conducted at the organization? 13 4.2.2 How many thesis have the R&D personnel published in well known overseas scientific magazines, patent filed, and products

developed for last two(2) years? Yearly average per current R&D staff. (Note : Contribution of the staff on patents hold by previous employers is not clear, and needs to clarify with INNOBIZ)

14 4.3.1 Determine the success of commercialization according to records of R&D conducted, technologies commercialized, awards received and certification granted. Judgement is made by calculating the weighted scores against the number of patents filed, awards received and etc.

15 4.4.1 Do they have a system in place that effectively Store, Control, and Utilize the technologies developed? Technology Analysis Ability

16 5.1.1 Do they have analysis system for external environment related to technology development? 17 5.2.1 What is the coverage of their medium and long term strategy for technology development in the future? 18 5.3.1 What is the type of resource analysis conducted to determine the technology development target and strategy? (how do they set

the development target and technology) 19 5.3.2 Are they currently practicing marketing activities to find customer’s needs on product development?

1st Criteria (Technology Innovation Ability)

Source: Malaysian Industry-Government Group for High Technology (MIGHT)


Ability to commercialize the Technology

Ability to Develop New Product Through

Technologies

•Capacity to Plan for New Product

•New Product

development Capacity

•Core Technology Supplement

Ability to manufacture using the technology

•Product Manufacturing Capability

•Quality Control

•Manufacturing Process

Innovation

•Procurement and outsourcing control

Marketing Ability

•Ability to set up and carry out marketing

strategy

•Competitiveness Analysis

•Management

commercialization of technology

2nd Criteria/Index: Commercialisation of Innovation Ability

135

II. TECHNOLOGY COMMERCIALIZATION ABILITY Ability to develop products using technologies

1 1.1.1 Does the CEO have a product development plan, and is the process of product development standardized. 2 1.1.2 To what level do they analyse on how the consumers uses their products, so that the developed products meets the

consumer’s needs. 3 1.1.3 Do they have a plan to commercialize their products, and are they executing as per the plans 4 1.2.1 What is the current level of analysis on the functions and features of the products to determine the specification of the

product. 5 1.3.1 What is the level of core technology supplement to make the product?

Ability to manufacture using technologies

6 2.1.1 Do they have a systematic operating system of production technologies to satisfy the quality requirements? 7 2.1.2 Are the production facilities maintained well, and how is the condition? 8 2.2.1 Are test equipments well maintained, and have they attempted to maintain the quality of these equipment (calibration etc.) 9 2.2.2 Are those QC activities being implemented adequate in ensuring the quality?

10 2.3.1 Is the production plan established rationally, and are the production records being maintained and utilized sufficiently for each year?

11 2.3.2 Is the Manufacturing process being implemented properly? 12 2.3.3 Do they have standard operating procedures for each workers, and are they checking the worker’s skill level?

Marketing ability 13 3.1.1 Do they have marketing strategy such as price determination, sales forecast, and analysis of the target market? 14 3.1.2 Are they able to classify the marketing channel for new businesses, the ability to determine the advantages and disadvantages of the

different marketing channels, and are they able to support the marketing channels 15 3.1.3 How do they analyse the target market? 16 3.2.1 Are they analyzing and responding to the life-cycle of new products? 17 3.2.2 Did they analyse and responded positively to the technical competitiveness of new products? 18 3.3.1 How well are they managing their internally developed intellectual properties; Did they perform patent search beforehand,

and did they file their IPs with the Patent Office? 19 3.3.2 How well do they build and utilize external network regarding commercialization of their technology. 20 3.3.3 Do they have the capability to conduct information collection for policies and regulatory standards? 21 3.4.1 What is the expertise and qualification level of the persons in charge of marketing new products, and how focus is his area of

responsibility.

2nd Criteria: Commercialisation Ability


Ability to respond to changes

•Ability to respond to new

technology development trends

•Ability to respond to the trends of new business &

new technology by competitors

•Medium & long term new business & technology development plan

•Ability to respond to the changes of

market/policy environment

Ability to innovate Management

•CEO’s talent and level of

experiences

•Organizational Management

CEO’s Sense of Value

•CEO’s trustworthiness

•CEO’s transparency

3rd Criteria: Ability to Manage Technology Innovation

4th Criteria: Results (Outcome) of Technology Innovation


Result of Technology Management

• Liquidity of Funds

• Management Performance Indexes

Result of Technology

Competitiveness Improvement

•Improvement Ratio of Technology

Competitiveness locally/internationally

•Market Competitiveness Improvement

through Technology Innovation

Technical Result (forecast)

•Acquisition of IP right and influential

effect

•Forecast Technology Transfer Sale

•Effect of utilization of technology

accumulation

-Brief by MIGHT for 25th Nov 2010 on 1innoCERT

138

III. TECHNOLOGY INNOVATION MANAGEMENT ABILITY Management's ability to innovate

1 1.1.1 Does the CEO has the willingness and policies for technology innovation. On that premise, do the operational personnel share the same willingness and perception?

2 1.1.2 Assessment of the CEO in the area of risk management and the ability to carry out technology management. 3 1.1.3 Does the CEO have a career history of servicing in the same industry? 4 1.1.4 Does the CEO have a good understanding of the technology? 5 1.2.1 Does the COE have the ability to management the operation?

Ability to respond to changes in circumstances

6 2.1.1 Are they capable of responding to changes in circumstances aggressively and positively? 7 2.2.1 Does the CEO has the system to find new products and new businesses of his competitors, and how prepared is the CEO able to

counter the threat? 8 2.3.1 Are the medium to long term plans rationally and realistically established? 9 2.4.1 Are their medium to long term plans able to respond flexibly to the changes in the surrounding business environment.

CEO’s sense of values

10 3.1.1 What is the trustworthiness of the CEO internally and externally? 11 3.2.1 How transparent is the CEO in managing the operation?

IV. TECHNOLOGY INNOVATION RESULTS Outcome of the technology competitiveness progress

1 1.1.1 What is your view on the improvement of competitiveness as a result of technology innovation? 2 1.2.1 What is your view on the market’s competiveness attributed by technology innovation?

Outcome of Technology Management

3 2.1.1 What is the ability to generate sufficient funds through newly commercialized product or technologies to finance the operation 4 2.2.1 Financial results indices - Evaluate financial ratios against industrial benchmark indices

Outcome of technology achievement (estimates)

5 3.1.1 What is the competitiveness of the IP rights (acquired or pending) as a result of technology innovation? 6 3.1.2 What is the coverage of the IP rights (acquired or pending) as a result of technology innovation? 7 3.2.1 Technology (or IP) sales forecast for the next 2 years (includes deals currently under discussion) 8 3.3.1 How big will an impact on the import substitution for the next 3 years, as a result of commercializing the technology's strongest

elements of competitiveness. 9 3.3.2 What will be the impact on employment, 3 years after the technology has been commercialized? (Includes the increase of

employment with the company and jobs created externally)

3rd Criteria/Index: Technology Innovation Management

4th Criteria/Index:



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Before You Can Take the Online Self-Innovation Assessment


Company Profile: Important to Select the Correct Award

Category, Sector, and Business Category


Company

profile


Assessment Sectors (Sector CANNOT be changed once you have chosen

in your company profile)

General Sectors:

Manufacturing,

Non-Manufacturing and services; and

Specific Sectors:

Biotech,

Design,

Software/ICT,

Agriculture,

Environment (sustainable development, renewable energy, etc), and

Construction.


1.1.1 What is the R&D investment ratio against the sales for the last two years

Answer: A. 20% or more Evidence:

Audited Financial report 2009

2010 2009 2008

* 751% R&D Investment vs. sales in average for 2009 and 2008

Example of how to answer and prove evidence during Onsite Audit


1.2.1 What is the yearly average R&D Manpower Ratio against the total employee for last 2 years?

Answer: B. 10% ~ less than 20% (on-line answer) A. 20% or more (Actual evidence provided) Evidence:

This does not include 3 senior expatriate in-house R&D engineers from partner, FUJIPOLY (Japan)


Organizational Chart: Product Development Cont’d 1.2.1

VP of Product Development

Scott West

Director - Product

Development

Sundar

Principal Engineer

CL Loke

Staff Engineer

CW Chai

Engineer

Logesh Vacant Vacant

Director -Business

Development

Mike Kwon

Continue: Example of how to answer and prove evidence during Onsite Audit

Organizational Chart: Research and Development, Material Fabrication Division

R&D Manager

Soo Yit Fong

Research & Development

Sr. Engineer

Steven Chin

Technician

(Vacant)

Design

Sr. Engineer 1

Soo Sing Goh

Draftsman

Ching Chin Shun

Sub Con Development

Engineer II

(Vacant)

Cont’d 1.2.1

Continue: Example of how to answer and prove evidence during Onsite Audit

2.2.1 How many projects have been completed for the last 2 years in joint/ contract/ cooperative research or advisory worth with outside research institutions or universities related to commercialization of technologies

Answer: A. 3 Projects or more Evidence:

1. LED Array in collaboration with Bridgelux - DSEM’s LED array are High Power Light engines at less than 1/10th of the size of the conventional LED array. With this , we have reduced the Carbon footprint of manufacturing this product.

Cont’d 2.2.1

2. Solar CPV (Concentrator Photovoltaic) Receiver in collaboration with Solarmation– DSEM is the first in Asia to embark on this project. CPV’s will reduce the footprint of solar cell plants.

CELL (Solarmation to DVM)

Wire Bonding (DVM)

Encapsulation (DVM)

Cell Attach (DVM)

Substrate (DST to DVM) Diode

(DVM)

QUESTION NO 8: THE ABILITY TO CONDUCT TECHNOLOGY INNOVATION (EITHER IN-HOUSE OR EXTERNALLY) IN ORDER TO GAIN NEW BUSINESSES SUCCESSFULLY?

Innovation Project Name Year

1 Sumandak Central Processing Platform (SUPG-B), 1st Platform with 6 legged in Malaysia. 2007

2 Sumandak Central Processing Platform (SUPG-B) is integrated platform 2007

3 Sumandak Central Processing Platform (SUPG-B) having 8 risers 2007

4 Sumandak Tepi Satellite Platform (SUJT-C), 2nd Platform with monopod in Malaysia 2007

5 Sumandak Tepi Satellite Platform (SUJT-C), transportation vertical instead of horizontal 2007

6 Sumandak Tepi Satellite Platform (SUJT-C), design with no of well is 6 more than normal 2007

7 Bunga Tulip Platform (BTA), 1st Platform with monopod in Malaysia 2005

8 Bunga Tulip Platform (BTA), transportation vertical instead of horizontal 2005

9 Bunga Tulip Platform (BTA), use 2 pieces jacket platform 2005

10 Bunga Tulip Platform (BTA), design with no of well is 6 more than normal 2005

11 Kinabalu Central Processing Platform (KNPG-B) - One Integrated Platform 2009

12 Kinabalu Central Processing Platform (KNPG-B) - 1st HP/HT field development in Malaysia. 2009

13 Kinabalu Central Processing Platform (KNPG-B) - Design for TAD and Jack-Up Rig 2009

Example of how to answer and prove evidence during Onsite Audit NOTE: Open original file first

Summary of Patents Filed


Example of how to answer Process Flow and prove evidence during On-Site Audit at the Manufacturing facility

Eeprom Burn-In

Chamber

PC Controlled ; Operating Temperature 75°C ~

180°C ; Read-Write Cycling ; Multiple Information

Display.

Climatic Test Chamber

( 2 units, Votsch & ACS )

Climatic ; Working range : Temp = -40°C ~ 95°C

; Humidity = 10% ~ 98%RH

Temperature Cycling

Chamber ( Air to Air )

( 2 units , Votsch &

ACS)

Hirayama Hastester Temp Range : 105°C - 150°C , RH Range : 65%-

100% , Pressure = 1-3 Atm , Continuous Timer = up

to 1000hrs

Heraeus Bake Oven Temp Range = Ambient to 300°C , Programmable

Temp Profile & Timer.

Convection Reflow Furnace

Hot Chamber : +55°C ~220°C ;

Cold Chamber : -80°C ~+70°C , Fast Ramping Mode ,

Ramp Up Rate =2.55°C/sec; Ramp Down Rate =

1.53°C/sec

PC Based , 8 Temperature Control Zone , High

Capacity


Non-destructive Analysis

• Stereo Microscopy (Low Power)

– Crack inspection - Contamination inspection

– Package defect - Wirebond/ die attach defect

• High Power Microscopy

– Die defect inspection - Contamination inspection

• X-Ray analysis

– Mold/ Epoxy void - Wirebond defect

• Scanning Acoustic Microscopy

– Die/ Leadframe delamination - Die Crack

• Curve Trace / Micro Probing

– Electrical failure validation

• Scanning Electron Microscopy

– Die defect inspection - Package inspection

• Electron Dispersive X-Ray

– Contamination element analysis - Element confirmation


1.5 – 2 days Final Test/Tape & Reel

3 – 5 days Assembly Cycle Time

Quality (PPM) 10 Final Test Outgoing

50 Assembly Outgoing

99.8% Tape & Reel

99.8% & above Final Test

99.8% & above Assembly

Yield

Evidence/Explanation:

The company are implementing Statistic Process Control method

Cont’d 2.3.2

EXAMPLE: 3.2.1 How big will an impact on the import substitution for the next 3 years, as a result of commercializing the technology's strongest elements of competitiveness? Answer:

Answer: B. Able to substitute more than 20% of current import amount

Evidence/Explanation: Company’s platform requires many SMEs and new SMEs to support. 70% of outsourcing has been done locally.

-Briefing by MIGHT for 25th Nov 2010 Meeting on 1innoCERT

SME INNOVATION AWARD CATEGORIES

No SECTOR >700 POINTS

ON-SITE AUDIT

1 Manufacturing 28 23

2 Services 36 21

3 Agriculture & Biotech 16 9

4 Packaging & Design 8 6

5 Green Tech. & Energy Efficiency 8 7

6 Halal 9 5

TOTAL 105 71

Best Innovation Award in Technology

(Manufacturing Sector)

SUBSEA EXPLORE SERVICES (M) SDN BHD

Best Innovation Award in Technology (Services

Sector)

ROMSTAR SDN BHD

Best Innovation Award in Technology

(Agriculture Sector)

TT BIOTECHNOLOGIES SDN BHD

Best Innovation Award in Design &

Overall Winner

IC MICROSYSTEMS SDN BHD

Best Innovation Award in Green Technology &

Energy Efficiency

DEVICE SEMICONDUCTOR SDN

BHD

Best Innovation Award in Halal

NUTRIVENTION SDN BHD

AWARD WINNERS

Company Organization Description

IC Microsystems Sdn. Bhd. (Cyberjaya) Mixed Signal IC Design Company

Prestigious Discovery Sdn. Bhd. (Kuala Lumpur) Design & Development of Mission Critical SCADA

Equipment and System

Romstar Sdn. Bhd. (Kuala Lumpur) Pipeline Integrity Tooling Services

Riskk.Com Sdn. Bhd. (Kuala Lumpur) Financial Market Online Real-time Software

RNZ (Kuala Lumpur) – Large local company Oil & Gas Platform Design Services

TTVISION Technologies Sdn. Bhd. (Penang) Intelligent Machine Vision Systems

TT Biotechnologies Sdn. Bhd. (Penang) Bioplastics (Polyactide)

Acehub Vista Sdn Bhd (Penang) Teaching Solutions for Engineering

JF Microtechnology Sdn. Bhd. (Petaling Jaya) Design & Manufacture Circuits Test Probes

(Semiconductor)

Subsea Explore Services (M) Sdn Bhd (Petaling Jaya) ROV (Remote Operating Vehicle) and ROV Systems

N2N Global Solutions Sdn. Bhd. (Kuala Lumpur) Software Development for Financial Market

Inno Integrasi Sdn. Bhd. (Petaling Jaya) Water Treatment & Bio-organic Fertilizers

Orchid Life Sdn. Bhd. (Bangi) Horticulture & Floriculture

MIR Valve Sdn. Bhd. (Shah Alam) Ball & Gate Valves (Oil & Gas)

CEMS Engineering Sdn. Bhd. (Petaling Jaya) Energy Management ( Chiller Air- Conditioning

Systems)

Hexagon Green Biotech Sdn. Bhd. (Kajang) Plant Tissue Culture (Agro-Based)




Dr. Norlela Ariffin Senior Vice President, Excellent Spring Sdn Bhd

[email protected]; [email protected]

Mobile: 6 012 200 2871

keynote 1.13- 031112 dr norlela wif s3

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