GEORGE TOWN: Southeast Asian semiconductor sales are projected to grow to US$19 billion (RM68.97 billion) in 2015, while the global consumption of materials and packaging materials is expected to hit US$5.6 billion, taking over current leader Taiwan.

SEMI Southeast Asia president Ng Kai Fai said the region alone commands 27% of the global assembly, test and packaging sector out of the expected US$46 billion semiconductor materials market.

“Not only does the region focuses on back-end manufacturing and contribute 27% to the global materials market — with Malaysia holding a market share of 10% to 15% — but it has 26% market consumption. In 2015, we are projecting the Southeast Asian semiconductor business to grow to US$19 billion and we expect the region to be the largest consumer of materials and packaging materials surpassing Taiwan by US$1 billion,” he told The Edge Financial Daily.

He added that for 2015 and 2016, SEMI estimates spending of about US$5 billion on front-end and back-end equipment in  Southeast Asia. Another US$14 billion is estimated to be spent on materials including US$11 billion on packaging-related materials.

Ng said the global semiconductor market would see an 18% rise year-on-year in its largest sector — the semiconductor equipment sector growing to US$44 billion this year.

Ng, who represents SEMI, a global industry association for semiconductor companies with 1,900 members, said he was confident of the sector’s growth based on emerging business areas such as Internet of Things (IoTs).

Ng said Southeast Asia possesses the potential to lead in the IoTs, and wearables sector where it could build on available technology.

“Traditionally, the way the semiconductor industry grew was through technology scaling. The interesting thing about IoTs is not about technology scaling but to build on the technology. This region is poised in a unique inflection point to capture this market sector.

“We have been lacking in ‘copying smart’ from the United States or developed economies on more developed technologies but IoTs are changing the landscape,” he said.

Meanwhile, SEMI Southeast Asia will be holding an event to bring together semiconductor companies and industry stakeholders at the Penang International Convention and Exhibition Centre from April 22 to 24. Themed “Innovation and Design Development”, it is being held for the first time outside Singapore and aims to champion regional collaboration to seize opportunities in the industry over the next two years.

This article first appeared in The Edge Financial Daily, on April 10, 2015.