2025 Budget Wishlist: Technological Industry Enhancing Productivity
📝【Exclusive Report】Ling Qiaosen
📰 Full text available2025 Budget Case Chases Nanyang!
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Technological innovation is a key driver in enhancing national productivity and global competitiveness, so the policies covering the technology and industrial sectors in the 2025 fiscal budget are believed to help drive overall economic development in Malaysia.
From the perspective of the technology industry, the government is expected to plan new policies based on the goals of the National Semiconductor Strategy (NSS) to transform Malaysia into a global powerhouse in electrical and electronics (E&E).
In addition, in the industrial sector with a high synergy effect with technology, it can be said that this sector combines emerging technologies such as artificial intelligence (AI), Internet of Things (IoT), and more innovative technologies as pioneers. The aim is to maximize output and reduce costs.
■ Technology Industry
The primary goal is to develop local champions.
According to Datuk Seri Wong Siew Tai, President of the Malaysian Semiconductor Industry Association (MSIA), fostering local champions should be the government's top priority.
He pointed out that technology acquisition and funding are key to nurturing local champions, and the government should consider emulating China by providing at least a 20% capital expenditure rebate policy.
After reducing the risks for businesses, they will be encouraged to invest in improving products or expanding into new technological areas, competing with other countries on the international stage.
At the same time, the government can introduce relevant incentives to strengthen the capabilities of local integrated circuit (IC) designers and developers, including extending Pioneer Status from 5 to 10 years; providing support for facilities or prototypes, laboratory and testing equipment subsidies; and adjusting the personal income tax rate of IC design engineers to 15%.
Alleviating the shortage of technology talents
$AGMO (0258.MY)$ Pointing out that the long-standing pain point in the industry is the shortage of technology talents, therefore, hoping that the government can introduce human resources-related policies in the budget.
Group CEO Chen Yiqiang suggests increasing training funds for Science, Technology, Engineering, and Mathematics (STEM), including collaborating with private technology companies to jointly design courses, which are all beneficial strategies to address the talent issue.
He further suggests that the government could consider strengthening existing talent retention measures, such as providing tax incentives or subsidies to enterprises willing to invest in employee skills enhancement programs.
Chen Yiqiang also believes that focusing on the overseas talent market, by relaxing visa measures for foreign technology talents and simplifying work visa procedures, can effectively alleviate the current talent shortage issue.
Focus on cybersecurity for small and medium enterprises
With the cybersecurity regulations in Malaysia in 2024 taking effect in August this year, the cybersecurity plans of small and medium enterprises should receive corresponding attention from the government.
$LGMS (0249.MY)$ Chairman Feng Zongfu pointed out that given the rapid development of the digital economy, the government should also consider subsidies for small and medium enterprises to help them initiate cybersecurity plans.
"When a country is intent on promoting a series of digital economy initiatives, cybersecurity should not be a neglected aspect."
Feng Zongfu believes that without a robust cybersecurity system, our country's digital economy vision will be difficult to achieve.
■ Industrial Sector
An adequate buffer period should be provided for the minimum wage.
With the adjustment of the minimum wage, Datuk Wang Ziming, the major shareholder of Hextar, expressed that the government should carefully consider raising the standard of the minimum wage and implement it gradually, providing sufficient buffer period for businesses.
In talent cultivation, a more complete and fair education system should be established to nurture talents that meet market demands.
Furthermore, considering the significant role of export orientation in national economic development, special tax incentives should be provided to relevant industries. This is because these companies not only employ a large amount of labor force but also stimulate domestic consumption levels, thereby helping to increase the Gross Domestic Product (GDP).
Furthermore, considering the significant role of export orientation in national economic development, special tax incentives should be provided to relevant industries. This is because these companies not only employ a large amount of labor force but also stimulate domestic consumption levels, thereby helping to increase the Gross Domestic Product (GDP).
As technology is in an upward cycle, the government could also consider subsidizing businesses that integrate artificial intelligence or any form of automation measures. It is believed that this can incentivize businesses to shift towards automation and reduce dependence on labor.
Focus on semiconductor backend subcontractors.
$KGB (0151.MY)$ CEO Yan Hanqing pointed out that semiconductor manufacturing supply chains are complex and global. Therefore, he called on the government to not only focus on backend manufacturers but also support local backend engineering service providers and subcontractors who play important roles in the supply chain.
Yan Hanqing said: "The government should formulate and implement local enterprise protection policies to ensure their participation in the main supply chain, especially at the time when overseas businesses are entering Malaysia."
In addition, Malaysia can also benefit from the "China+1" strategy. The government can use incentive measures or expedited regulatory approvals to encourage local enterprises to collaborate with foreign companies, promote technology transfer to Malaysia, and maintain advantages in the global supply chain.
It is also crucial to promote financing and loan channels for the industry, as businesses require substantial funds to launch large projects, invest in new technologies, or expand operations. Therefore, favorable financing options will help businesses seize opportunities for growth.
Encouraging localization of auto manufacturers
As the 2025 budget will focus on economic structural reforms, this will play a key role in ensuring the long-term resilience and competitiveness of Malaysia's industrial sector.
$MCEHLDG (7004.MY)$ Director Wu Jiajun believes that the government can create an environment for high-tech manufacturing through incentive measures and policies, and provide targeted financial assistance for auto parts suppliers. This will not only stimulate growth but also create opportunities for technical and knowledge-based jobs.
Furthermore, encouraging localization policies for auto manufacturers will further strengthen their cooperation with local parts manufacturers, enabling the latter to enhance their research and development capabilities.
By cultivating this ecosystem, the government can not only accelerate industrial growth but also ensure the industry is well prepared for long-term development.
Establishing a labor market for autos
$FEYTECH (5322.MY)$ Local businesses are often at a disadvantage when it comes to talent competition, as overseas businesses have richer resources and can provide more competitive conditions.
Executive Director and CEO Wu Keni said: "To address this issue, we hope that the government can propose measures to support local suppliers, ensuring a balance between attracting investments and protecting the local ecosystem."
She also advocates for the government to develop more targeted training programs to establish a strong labor market, especially in the auto trade sector.
Finally, in terms of incentives, the company Gong hopes that the government can unify environmental protection technology measures, as policy uniformity will help businesses better plan their investments.
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Source: Nanyang Business Times
Disclaimer: This content is for reference and education purposes only, and does not constitute any specific investment, investment strategy, or recommendation. Readers should bear any risks and responsibilities arising from relying on this content. Before making any investment decisions, be sure to conduct your own independent research and evaluation, and seek advice from professional advisors when necessary. The author and related participants are not responsible for any losses or damages resulting from the use or reliance on the information contained in this article.
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