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CR Vol. 16, No.

3&4, 2006

COMPETITIVE FACTORS OF SEMICONDUCTOR INDUSTRY IN MALAYSIA: THE MANAGERS’ PERSPECTIVES
by A. Solucis Santhapparaj, Jayashree Sreenivasan and Jude Chong Kuan Loong

EXECUTIVE SUMMARY In an emerging global competitive environment, the Malaysian semiconductor industry is facing threats from low cost countries with limited innovative capabilities. It urges for improvement in competitiveness of the Malaysian semiconductor industry. This study focuses on the perspectives of the managers towards the enhancement of competitiveness. Through a focus group interview and data collected from 200 managers working in semiconductor-manufacturing units in Malaysia, the study identified twenty-two competitive factors for the improvement of competitiveness of the semiconductor industry in Malaysia. Since the collected data did not form a normal distribution, nonparametric tests such as Chi-squire test and Mann-Whitney U test were used to test the framed hypotheses. Based on the analysis, ten key competitive factors were identified out of the identified twenty- two competitive factors through focus group interview. Further, the study also highlighted the differences in the opinion of competitive factors of technical and non-technical job functioning managers.

INTRODUCTION Globalization has urged organizations to create competitive

capability through new strategies, which aims to exploit opportunities and to reduce threats (Harrison and Vessels, 2004). Competitiveness of a company depends on the ability of the organization to design, produce and deliver high value products to needs of the customers. Tracey et al., (1999) have empirically proved that factors like prices offered, quality of the product, product line breadth, and delivery capabilities are key factors to determine competitive capabilities. Organizational resources, such as know-how, physical capital, human capital and social capital supports achieve competitive capabilities (Harrison and Kessels, 2004). Competitiveness can be created through strategic planning and creating a learning environment in an organisation (Bauer, 1999, Tanabe, et al., 2004). However, there are negative opinions on the effectiveness of strategic planning on reducing the uncertainty associated with future markets (Baumol and Benhabib, 1999). In some cases, the effectiveness of strategic planning on active competitiveness has proved ineffective (Tanabe, et al., 2004). In general, the survival of a company at the micro level and the growth of a country at the macro level in the era of globalization heavily depends on the competitive capability of the company and thereby the competitiveness of the country. Nearly two decades after the invention of the first Integrated Circuits by Jack Kilby in 1958, Asia became an ideal breeding ground for semiconductor companies as Western firms sought to farm out labor-intensive production processes to Asia’s newly industrializing economies. Kozmetsky and Yua’s (1998) comparative performance analysis shows that the US, Japanese, South Korean and Taiwanese semiconductor companies were major competitors in the global semiconductor industry. Through a national approach on

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Moreover. Hence. Thus. if Malaysia wishes to remain a vital global player. Texas Instruments. The growth in production of semiconductors.S. The low value segment is prone to downswings in demand. based chipmakers like Intel. Malaysia’s export and growth in export of semiconductors. total fixed assets. 2006 technology development. as well as foreign direct investment (FDI). paid-up capital. Advanced Micro Devices. 1996). Much of the investments are concentrated on the island of Penang. Such external threats are forcing Malaysia to re-think its role in the semiconductor industry. South Korea and Taiwan have reached competitive positions in the global semiconductor industry. since both countries have unique characteristics (Chen and Sewall. most of the reputed companies in the chip business have a back-end manufacturing operation in Malaysia. propelled by the pace of innovation. 3&4. These companies were started in Malaysia to take advantage of the country’s cheap labor at that time. assembling and testing.e. This industry also dominates other manufacturing sectors in terms of employment. National Semiconductor. increasing labor costs and upbeat on investment in service sector. Hence. Moreover. which is popularly known as the “Silicon Island” of Southeast Asia. SEMICONDUCTOR INDUSTRY IN MALAYSIA Malaysia’s role in the semiconductor industry goes back to the early 1970s when the U. corporate governance. Malaysia lacks some of the fundamental aspects in terms of science and technology. 16. shortage of highly skilled labor. BACKGROUND OF THE STUDY Systematic production planning.S. Eight out of eleven free trade zones in Malaysia are monopolized by the semiconductor and electronics industry. production engineering and quality systems are the primary factors which attract foreign direct investment to the electronic component manufacturing sector in Malaysia and the major share of investments are made by U. Malaysia has lost its position in the global competitive position for FDI and its rank 198 . procurements. the Malaysian semiconductor industry is still concentrating on low value segments. Western Digital and Motorola established off-shore Integrated Circuit (IC) assembly and test operations. integrated circuits and electronic transistors in Malaysia is shown in Table 1. The sharp drop in world demand for semiconductors in the year 2000 and the emergence of China as a favourable location for investment among high-tech multinationals was the primary reason for the drop in growth in the year 2001 and later. Malaysia’s competitive advantage may be eroding because of new players such as China. ChipPac. 2005). The semiconductor industry plays a major role in making Malaysia an industrialized country. electronic equipment and parts is presented in Table 2. companies. logistics.CR Vol. i.. eventually led to the rise of advanced technology-driven Asian economies within a generation. the dynamics of semiconductor economics. the semiconductor industry acts as the backbone of Malaysian economy. The semiconductor industry contributes one third of the total export. In recent years. No. The semiconductor industry contributes about 30 per cent of Malaysia’s total manufacturing sector output and there are 40 semiconductor companies currently operating in Malaysia (Economic Research. there is an urgent need for them to move up the value chain to withstand the existing competition. local competition.

084 20. No.9 1993 3.1 1994 3.368 8.071 -5.692.1 1999 9.2 1996 5.5 1992 3.413 5.4 6.571 28.8 1991 2.959 11.262 -5.4 2001 13.545 0.519 32.6 13.9 10. % Growth over the last year Integrated circuits TABLE 2 Exports and Percentage Growth in Export of Semiconductors and Electronic Equipment and Parts (RM* in Millions) % % Growth Electronic Growth Semiconductors over equipment over the last & parts the last year year --35. Integrated Circuits and Electronic Transistors (million units) % Electronic % Growth Growth transistors over the over the last year last year 1989 2.336 15.774 -4.3 2000 16.1 2002 15.277 10.236 16.951 20.424 43.509.228 6.60 15.1 33.730 4.958 6.1 2003 15.5 19.373 64.8 17.0 1998 8.888.4 21.1 6.757 39.482.189 18.036 11.1 8. where it was positioned at 23rd. 16.109 20.9 1997 7.956 2. Vol.524 -17.4 6.6 2004 18.5.2 54.5 7.1 23.902 28.1 9.3 39.230 -2.0 5.796 -1990 2.6 24.5 10.2 19.2 30.887.410 14.8 40.565 13.1.1 9.410 -2.4 11.432 41.2 29.457 -18.2 13.1 1995 4.228 28.1 20.7 Source: Economic Research.424 17.760 13.491 11.058 8.3 9.738 7. P.0 49.9 8.121 16.689 4.247 29. 2006 TABLE 1 Production and Percentage Growth in Production of Semiconductors. Year Semiconductors fell to the 22nd position (FDI Confidence Index) out of the top 25 destinations in the year 2001 and further worsened in the year 2003.60 59.5 13.530 30.4 17.123. 3&4.9 12.622 -7. Bumiputra-Commerce Bank Bhd.CR Vol.916 14.401 2.00 37. 2005.3 14.9 7.6 Year 1996 1997 1998 199 .6 28.989 14.8 6.237 10.

They emphasize that Malaysians should improve and concentrate on innovation. Lin-Liu. Tracey et al. In other words. No. semiconductor manufacturing units in Malaysia need to think ‘outside the box’. Hence.3 6. and is facing competition from lower cost countries like China.289.5 -17.990. recently China has entered in the World Trade Organization. China. he emphasizes that employees should maintain good ethics. claims that size reduction.0 20. as well as other upcoming developing neighbors like Thailand.101.9 20. unique technological approach and so on (Chen and Sewell. Moreover.183. The quest for a global competitive position forces individual semiconductormanufacturing plants to struggle for greater efficiency and to seize every opportunity for improvement. low value segment.CR Vol.9 85.6 -14. 3&4.3 9.2 20. particularly in labor intensive manufacturing sectors (Business times.70 Malaysian Ringgit (RM) Source: Economic Research. to remain competitive. stress that productivity in Malaysia must increase to match those of more advanced nations apart from the gaps in innovation. increase in wafer diameter. Siregar and Keng (2001).0 95. Emmanuel (2002).485.410. The existing literatures show that competitiveness may be achieved through strategic planning. and new product development. P. human resource. high integrity and constant respect to suppliers and customers to keep up Malaysia’s competitive position. which is also a threat for the Malaysian semiconductor industry. Emmanuel (2002) is optimistic about Malaysia’s competitiveness..4 71. 200 . 16.0 72. Malaysia moved up to 15th position in 2004 whereas China maintains its 1st position in 2004 (FDI Confidence Index. Malaysia has to work harder in order to compete with China. 2002). 2002. The Economic Research of Bumiputra-Commerce Bank Bhd (2005) highlighted that the Malaysian semiconductor industry is currently dependent on low tech manufacturing. design. Abeysinghe. However. Vietnam..8 60. Mathews.7 9. organizational learning.9 * 1 US dollar = 3. 2006 1999 2000 2001 2002 2003 2004 65.2 8. Vol.436. in spite of challenging environmental factors. 2005. despite direct head on competition with the awakened giant.680. 2002. 2004). However. 1996. the study is made with the objective of identifying and analyzing the competitive factors of the semiconductor industry in Malaysia through the perspective of the people having expertise and experience in this field. and Cambodia.6 16. increase in chip size.7 -2.0 33.1 99. Bumiputra-Commerce Bank Bhd. and Cho.1 79. 1999 and Tanabe et al.8 84.1.1 79.110.530.400.1 82. trade and global investments. 2004). Hatano. process.307.6.8 89. Further. and defect reduction are among other manifestations that have a direct bearing on the competitiveness of manufacturing capabilities. Philippines. 1999.

The focus group agreed with 22 variables that are crucial in determining competitiveness in the current semiconductor business environment in Malaysia. it was decided to collect the primary data from managers performing technical and non technical job functions. and job status of the sample respondents. occupation. out of the total 23 companies. Part III attempted to assess the opinion and feedback on factors determining the competitiveness of the semiconductor industry and covered the 22 questions which emerged from the focus group interview. Each question in Part II and Part III was developed using Likert. there are 23 manufacturing plant located in these two zones. the focus group interview revealed that on average. out of the eleven Free Trade Zones where the semiconductor-manufacturing units are concentrated. The survey instrument was divided into three parts. Hence. To finalize the survey questions. 3&4. with a rating of 1 as very important and 5 being least important. current issues and threats to its existence. working experience. This part consisted of 10 questions. No. A total of 200 samples were collected by visiting each company. Part II emphasized queries pertaining to the nature of the semiconductor business cycle. Since semiconductor units are heavily concentrated in free trade zones. In the second stage. 20 individuals were randomly selected.scale ranging from 1-5. 160 respondents have technical backgrounds and 40 respondents have non-technical backgrounds. In each selected company. The focus group consisted of 6 managers from two manufacturing units. Attempt was also made to suggest new ideas and variables based on their work experience. the managers working in the semiconductor-manufacturing units in these zones were identified as the target population. 10 companies were selected randomly by simple lottery method. and 4 non-technical managers. A self-administered questionnaire was developed based on the focus group interview. it was possible to get a 100 percent response. This part comprised of seven questions. The study adopted multistage random sampling techniques to identify the final sample respondents. Further. focus group interviews was done to streamline various overlapping and redundant factors that were identified from the survey of literature. Since personal visits had been made several times. The same has been tested through a pilot study. nearly 80 percent of the semiconductor plant management staff performs technical job functions and 20 percent perform nontechnical job functions. In total. nature of job. two zones namely. gender. The focus group interview was useful to finalize the variables to be included in studying the competitive factors. Part I attempted to collect the demographic data concerning age. income. 16. 16 technical managers. In the first stage. marital status.CR Vol. Ulu Klang and Sungei Way were selected through simple lottery method. 201 . Out of the total 200 samples. 2006 METHODOLOGY OF THE STUDY Population and Sample The population of the study consists of managerial level employees in semiconductor-manufacturing units in Malaysia. education level. It also brings to light the fact that the approach towards competitiveness varies between the managers performing functions that are technical and nontechnical in nature.

0 20.CR Vol. since the collected data does not form a normal distribution. TABLE 3 Demographic Profile of the Respondents Sex Male Female Total Nature of job function Technical Non technical Total Age <25 25-34 Frequency 144 56 200 Frequency 160 40 200 Frequency 30 43 Percent 72. Tools of Data Analysis Apart from simple percentages. 2006 Hypotheses Based on the literature review and the outcome of the focus group interview the following hypotheses have been developed: Hypothesis 1: H0: There is no significant need to improve the competitiveness of the semiconductor industry in Malaysia. H1: There is a significant need to improve the competitiveness of the semiconductor industry in Malaysia.0 100.0 per cent) were in the age group between 35 and 44. 16. The male domination in managerial jobs could be explained by the fact that. Hypothesis 2: There is no significant difference H0: between the technical and nontechnical group of executive’s opinion about the importance of the competitive factors. More than 55 percent of the sample respondents hold bachelor’s degrees. 3&4. No.0 21.0 percent 15.0 percent 80. Chi-squired test has been used to test the perspectives of managers on the need for improvement in the competitiveness of the semiconductor industry in Malaysia. The majority of the respondents (39.5 202 . mean scores of the opinion of the 22 competitive factors has been estimated to rank the competitive factors. men in general tend to prefer a career in managerial profession. DATA ANALYSIS AND DISCUSSION The demographic profile of the respondents is presented in Table 3. The male respondents outnumbered female. The difference between the opinion of technical and non-technical managers on the competitive factors is studied by applying U test.0 28. H1: There is a significant difference between the technical and nontechnical group of executive’s opinion about the importance of the competitive factors. in Malaysia.0 100.

D Degree Total Source: Computed from Survey data.0 203 . 2006 35-44 45-54 >55 Total Education level High school No formal education Diploma Bachelor’s Degree Master’s Degree Ph. the entire sample has been classified into two groups as shown in the table 4.0 20. Alternative Hypothesis H1: There is a significant need for the semiconductor industry in Malaysia to improve its competitiveness. To perform the Chisquare test. 16. the Chi Square “Goodness of Fit Test. 3&4.0 22.0 1 SOURCE: Computed from survey data with SPSS 11.0 percent 1.0 100. 78 41 8 200 Frequency 3 2 44 113 35 3 200 39.5 1.5 1.5 4.” a non parametric statistical test is used. No. Category 1: Significant This classification refers to respondents who either agreed or strongly agreed with the fact that there is a need for the semiconductor industry in Malaysia to improve its competitiveness. Perception Towards the Need of Competitiveness: Null Hypothesis H0: There is no significant need for the semiconductor industry in Malaysia to improve its competitiveness.CR Vol.5 100. Hence.0 industry’s competitiveness in Malaysia do not form a normal distribution.5 17. Both the graphical and the Kolmogorov-Smirnov K-S method confirms that the data collected of the need for the improvement of the semiconductor TABLE 4 Categorical Classification of Sample Classification Significant Insignificant Total Observed 197 3 200 Expected 198 2 Residual -1.0 56. in order to test Hypothesis I.

H0 : There is no significant difference between observed frequency and expected frequency. It is inferred that there is a significant need for the semiconductor industry in Malaysia to improve its competitiveness.635. the ratings of each factor according to its importance for technical and non technical group are not exactly the same. No. Relative Importance of Competitive Factors The respondents were asked to give their opinion (Likert. Expected Frequency It is anticipated frequency predicted by the Chi Square in the Null Hypothesis.1 which falls within the critical region. the reported ratings of identifying important competitive factors by the technical and 204 . Significant (< 3) = 197 Insignificant (≥ 3) = 3 The residual value in the right extreme of the Table 4 indicates the difference between the Observed Frequency with the Expected Frequency.01. Based on table 6. 2006 TABLE 5 Calculated Chi-Square Statistics Estimated Values Chi-Square Df . 16.505 1 Asymp.CR Vol.01 percent. the observed frequency very closely matches the expected frequency. or strongly disagreed towards the need for Malaysian semiconductor industry to improve its competitiveness. Inference Since χ2Calculated < χ2 0. H1: There is a significant difference between observed frequency and expected frequency. The corresponding mean values and ranks for the technical group and non technical group are also presented for comparison. H0 can be confidently accepted. . Insignificant (≥ 3) = 2 Observed Frequency It is the actual frequency counts that are observed in the 200 samples. Significant (< 3) = 198 2.01. The result of the Chi Square goodness of fit test is indicated in Table 5 With α = 0.Scale) on the 22 competitive factors identified through the focus group interviews.1 is 6. disagreed. The mean score has been estimated and it has been arranged according to their relative importance ratings as evidenced by their mean values of total samples (Table 6).477 SOURCE: Computed from survey data with SPSS 11. Formulating Hypothesis for Chi Square Goodness of Fit Test The original Hypothesis I with H0 and H1 is restated as below. Overall. If the mean score is approaching 1 the variable is highly important for competitiveness since the respondents’ opinion ‘Strongly agreed’ takes numerical value 1.0 Category 2: Insignificant This classification comprises of respondents who were either neutral. Therefore. Sig. the critical value for χ2 0. 1. specifically for this Chi Square testing. 3&4.

Meanwhile.59 2 1.30 10 3 9 5 7 8 11 14 12 Competitive Factors Continuous quality improvement Continuous cost reduction to ensure high ROI Focus on technical skill development and enhancement Intensify productivity improvement Production cycle time improvement Improve manufacturing flexibility in terms of planning.16 2. It also serves as the key advantage for Malaysian semiconductor manufacturing plants to differentiate themselves against the threat of emerging low cost countries.11 2. Productivity and cycle time improvement is ranked fourth and fifth. and cost reduction is very critical for meeting an organization’s bottom line.24 2. This aspect is crucial particularly in the semiconductor industry. The third competitive factor is technical skill development. The most prominent similarities is that both groups consider quality as the most important competitive priority.CR Vol.27 2.30 2. Both factors are concerned with maximization of output and improvement on timely delivery of products to customers.10 1.65 1. Cost reduction has been identified as the second priority.20 2.53 2 2. 3&4.44 2 4 5 6 7 8 10 9 11 205 . suggesting that quality improvement has been the main focus of current management thinking. The means and ranks for combined sample data of both groups are used to identify the top ten competitive factors.08 1.07 2.23 2. strategy & capacity Continuous investment on human capital development Establish different business operating model with each SBU Meet KRAs / Score Cards of corporate levels Building strong integrated network of supply / value chain Application and adaptation of ICT to improve efficiency of daily operations All Samples Technical (n = 200) (n = 160) a Mean Rank Meana Rank 1. This finding is consistent with many other studies.03 2.86 2. respectively.55 2.91 2.41 3 4 5 6 7 8 9 10 11 1.14 2.46 1 1. It is indeed the fundamental objective of any business entity to maximise profitability.85 1. which thrives on technology and engineering innovation.74 1. This is because current manufacturing plants need to align themselves TABLE 6 Relative Importance of Competitive Factors Non Technical (n = 40) Meana Rank 1.18 2. manufacturing flexibility is being viewed as the sixth important factor. No.90 1.48 1 1. 2006 non technical group bear more similarities than differences.98 2. 16. These factors are directly linked to profitability and customers’ satisfaction in the long term.40 1 1.54 1.61 3 1.74 1.73 2.

65 18 3.64 18 1.82 19 3. Failure to do so.83 12 3.86 20 3.08 Improve managerial skill 3. The importance of ICT is being reflected in the 13 15 4 6 16 21 19 18 17 22 20 206 . 5 = Very Insignificant SOURCE: Computed from survey data with SPSS 11. to develop integrated network of supply/value chain is knowledge workers in order to remain considered the tenth competitive factor in competitive.93 Note: a1 = Very Significant.59 17 3.04 22 3. This factor will eventually this study.81 19 3.88 Excellent corporate governance and workforces' ethical behaviour 3. but not the least. Moreover. products.92 20 4.80 Public relation / rapport building to gain corporate confidence 3.55 Encourage technical patent disclosure 3.24 15 3.23 14 3.29 15 3. consequently.01 22 4. 2006 Highlighting intention to move up to higher value added products 2.0 continuous inflow of foreign direct to parallel ever changing customers’ investment (FDI) to our country for our demand.94 21 3.88 Improving and upgrading equipment efficiency 3.95 Encourage creativity and innovation involvement 3. line with the Malaysian government’s Last. It is in the semiconductor industry.03 Establish a flat organisation to improve response time 4. having an policy and Vision 2020. this will serve as an Human capital development is effective marketing tool to boost local ranked as the seventh factor which is in capability and competitiveness. strongly believed that real time and highly Establishing business operation customized products could be assembled models to align with each strategic and delivered to customers on time. It is believed that the presence transform the current mode of of large semiconductor MNCs will manufacturing operations from producing indirectly contribute to the growth of our low cost products to high end and complex local vendors and suppliers as well.42 16 1. corporate levels are ranked as eighth and Communication.78 Portal or web site development for convenience of SBUs 3.10 14 3. which is currently being to gain the confidence and momentum of intensified by our government as well. Hence.85 13 2. It is essential to the growth opportunities of an convince the corporate management and organization in the long run. These competitive well as Electronic Commerce (efactors are deemed to be necessary in order commerce). and Technology (ICT) as ninth respectively.88 13 2. 16. No. 3&4. this aspect is also a fully integrated system will improve the important to improve existing weaknesses overall efficiency of the workforce.31 16 3. 3 = Neutral.76 12 2.38 Venture into R&D activities 2.38 17 3. This business units (SBUs) and meeting all Key particular factor basically involves Result Areas (KRAs) and Scorecards of primarily the application of Information.93 21 3.58 Future leadership and succession planning 3. will jeopardize semiconductor MNCs.CR Vol.

which is ranked 18th on the whole. are not essential to be pursued at this period of time. and ratio scales.64 compared to non-technical member with a mean of 1. These factors are: a) Improve managerial skill The non technical group seems to show a very favorable response to this aspect with a mean of 1. the non-technical group showed a strong preference to the importance of managerial skills compared to their technical peer. The mean of each variable by job function and its respective significant pvalue is summarized in Table 7. Similar observation is perceived on the creativity and innovation involvement factor. 2006 sense that this aspect is ranked on the eleventh position on the overall sample. Equipment efficiency improvement and corporate governance/ethical behavior is positioned 16th and 19th with both groups illustrating almost the same preferences. Last. To be consistent with the objective of this research study. 3&4. these organizations have a well established management structure leaving little room for improvement in these factors. future leadership and succession planning and leaner organizational structures are considered the least important factors for both groups. The Mann-Whitney test does not assume that the population follows a normal distribution. ranked it in the 15th position.05. The remaining competitive factors are equally significant for the semiconductor industry to ensure its existence in Malaysia. This finding is again related to 207 . All the results displayed in this table are based on a 5 point Likert scale from 1 – 5. but not the least. The other factors are basically selfexplanatory and can be explained by referring to Table 6. only the top ten factors are elaborated on. Based on Table 7. The majority of these competitive factors ranking from 11 to 22. 16. Such observation is due to the fact that the nature of job function plays a vital role in influencing respondents’ feedback on this particular variable.80 versus the technical group with the mean of 3. but assumes that the shapes of the two distributions are identical. the following comparisons between both groups can be observed: Only 6 of the 22 competitive factors show a significant difference between technical groups versus non technical groups. α = 0. Venturing into R&D activities is ranked 12th on overall basis with technical groups showing higher preference at 13th position while its non technical workforce. Differences in the Perspective of Technical and Non-technical Job Functionaries on the Competitive Factors The Mann-Whitney U test is used to test the differences between means of the score by technical and non-technical job functionaries. though important. The reason for their poor ratings is probably due to the fact that most of the organizations selected for this study were in existence for more than 20 years in Malaysia. Generally. No. interval. the technical group remained quite neutral as far as this aspect was concerned. Hence.88.42. Hypothesis II testing is done at the level of significance. The test can be used with ordinal. On the contrary.CR Vol. with a rating of 1 being very significant and 5 being very insignificant. b) Public relation / rapport building to gain corporate confidence The technical member showed quite an unfavorable response with the mean of 3.

To a certain extent.7660 0.85 1.30 0. Though it is expected that the technical workforce will put more emphasis on this variable. with a mean of 1. Overall.9500 0.3590 0.73 1.40 1.0740 No Yes No 208 .0080 0.38 2.20 2. 16.90 1.86 1. No.05 No No No Yes Continuous quality improvement Continuous cost reduction to ensure high ROI Intensified productivity improvement Improve managerial skill Improve manufacturing flexibility in terms of planning.98 2.0320 0.07 3.16 2.74 3.85 2.55 0.53 1. indicating that technical skills are important to improve competitiveness. Meanwhile.CR Vol.42 1.0000 Significant at α= 0.0000 0.48 1.10 2.1330 0. the mean for non-technical groups in this aspect is slightly higher at 2.88 1.0590 0.4970 0.9170 0.18 1.1270 0. c) Focus on technical skill development and enhancement There is a significant disparity between the groups in this competitive factor.64 2.61 1.80 Mann Whitney P-Value 0.54 2. technical groups showed a strong agreement. the technical group tends to focus on engineering improvement activities extensively compared to the non technical group.44 2. it is surprising that the non- TABLE 7 Test Statistics of Mann-Whitney U Test Competitive Factors MEANa Non Technical Technical 1.08 2. 2006 the influence of job function.30 2.23 1.54.6460 No Yes No No No Yes No 2. 3&4.10. strategy & capacity Public relation / rapport building to gain corporate confidence Continuous investment on human capital development Establish different business operating model with each SBU Production cycle time improvement Focus on technical skill development and enhancement Meet KRAs / Score Cards of corporate Application and adaptation of ICT to improve efficiency of daily operations Highlights the intention to move up to higher value added products Building strong integrated network of supply / value chain 2.

93 3.38 for the technical & preference.92 4. response pertaining to this factor only serves as a supporting medium compared to most of the technical staff and hence does not contribute who is sitting on the fence by significantly in determining the responding fairly towards this factor.95 respectively in this management. they showed an With the level of significance α = 0. unfavorable preference to this variable.83 3.1670 No Establish a leaner flat organisation to improve response time 4. 2006 Venture into R&D activities 2.23 and 3.93 0.03 0. 3 = Neutral. In other words. technical members respectively.CR Vol. the majority of non technical site development intended to align with group demonstrated a favorable the SBUs’ business operation model.24 3. Even though there is significant difference d) Intention to move up to higher value between these two categories of added products workforce. continuous existence of our This is because the technical staff semiconductor industry in Malaysia. This is because scientific and Both groups illustrated an unfavorable engineering breakthrough forms the answer to this factor with the mean of essential foundation for the survival of 3. 3&4.0000 Yes Future leadership and succession planning 3.04 3. the technical particular group is more result staff illustrated higher preference to orientated.23 3.93 and 3. strongly believed that the portal or web Overall.85 and 2.1190 No Portal or web site development for convenience of SBUs 3. No.55 0. In other words.0 e) Portal or web site development for technical groups responded positively as convenience of SBUs well.59 3. 5 = Very Insignificant SOURCE: Computed from survey data with SPSS 11. 16. this aspect while the non-technical 209 .1850 No Equipment efficiency improvement and upgrade 3.0350 Yes Excellent corporate governance and workforces' ethical behaviour 3.05.88 0. both groups showed a significant Compared to the non technical group difference in this factor with the mean which generally showed a higher of 2. strongly believed that merely f) Encourage technical patent disclosure highlighting the intention to move up Basically.95 0. this factor.58 0.4950 No Encourage creativity and innovation involvement 3.3830 No Encourage technical patent disclosure 3. the technical workforce non technical group respectively.7100 No Note: a1 = Very Significant. the technical group and non to higher value added products is not technical group demonstrated sufficient to gain confidence from significant difference with a mean of either stakeholders or corporate 3.78 0.58 for technical and nonsuch high technological industry.08 0.82 3.

Where is the illusive bottom of the electronic cycle? Mid-yearf Forecast update. (2004). flexibility in organizational strategy. J. Such scenario arises because the non technical workforce believed that the technical patent disclosure is a long term solution. annual strategic meetings. a production of knowledge. Choy Keen. and Meng. skill development. Further. Graham. group and the non-technical group. It should provide better informal learning opportunities to the employees to build a committed and skilled work force to meet the challenges arising from emerging low cost countries. the organization should be a reservoir of knowledge. The literature shows that in the emerging knowledge and information economy. (1996). 210 . Business Times.. 11. Research Policy. it is advisable to create more informal learning opportunities within the organization such as job rotation. cost reduction. Claudio Felisoni De. Malaysia will have to work harder to attract FDI. and Alexander. 3&4. (1999). etc. it is believed that this prevailing factor is irrelevant to the current timeframe. Baumol. No. this expectation can only be realized if the industry moves to high end products where abundant opportunities for new discovery and invention are available. National University of Singapore. 16. Angelo. Tilak. in terms of competitive factors. Moreover. through both non-formal and informal learning.20). Econometric Studies Unit. Through the focus group interview and the opinion from the managers. (2002. Reza.. This can be achieved by making an organization be a learning organization. it is observed that the Malaysian semiconductor industry should develop a better learning environment. 51-59. 2006 peers seemed to treat this factor as insignificant.. The effectiveness of strategic planning: Competitiveness in the Brazilian supermarket sector. productivity improvement. Business Source Premier. Nov.CR Vol. Strategies for technical development in South Korea and Taiwan: The case of semiconductors.. Cheng-Fen. REFERENCES CONCLUSIONS The study clearly shows that the Malaysian semiconductor industry should concentrate on quality improvement. between the technical Abeysinghe. (2001). and should have better network for knowledge sharing and knowledge formation (Harrison and Kessels. Mario. Chaos: Significance. 759-783. Siregar. 3 (1) 77-105. and Benhabid. Hence. and brainstorming sessions in order to minimize the disparity and the difference of opinion between both groups. and Sewell. Malaysia. mechanism and economic applications. Nicholas. both technical and nontechnical. the study shows that there are few differences of opinion. Chen. Cited in Tanane. Collective decision-making and collaboration are essential for the sustainability and continuous growth of an organization.. Therefore. Journal of Economic Perspective. W. 2004). 25(5). Journal of Retailing and Consumer Services. to keep competitiveness in this industry.

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