Despite concerns about the high global crude oil prices and rising interest rates, Malaysian American electronics manufacturers believe that there will be steady growth this year, although overall performance may be worse than in 2004. The Malaysian American Electronics Industry (MAEI) predicts in its annual report that overall sales will increase by 10.3% to around 21.6 billion US dollars in 2005, with semiconductor sales alone growing by 17.6% to around 8.9 billion US dollars.

MAEI's members include Motorola, Dell, and Intel, accounting for approximately one-third of Malaysia's electronic exports. However, the above predictions are higher than the Semiconductor Industry Association (SIA)'s forecast of a 6% increase in global chip sales in 2005, but the overall target is lower than the 18.4% increase in MAEI sales in 2004.

MAEI stated that emerging consumer electronics and wireless products support the growth of the electronics industry& ldquo; Since the industry began to recover in 2002, it has maintained a growth trend, and it may have been the same in 2005& rdquo; The association stated. Although it is expected that member companies of MAEI will reduce their investments from $631 million to $395 million this year, MAEI Chairman Wong Siew Hai stated that spending on design and development will increase significantly by 72% in 2005, reaching around $305 million.

The agency also downplayed the trend of manufacturers flowing to the mainland. Wong Siew Hai pointed out that the continuously rising labor costs and high personnel turnover rate will make mainland China no longer the best production location with significantly lower costs than Malaysia. But MAEI also raised a warning, including rising salaries and public service costs, indicating the attractiveness of Malaysia as a manufacturing center; It is slowly disappearing;. MAEI also calls on the Malaysian government to improve efficiency and invest more funds in research and development to attract foreign investment.