Kuala lumpur: Digital twin technology and smart manufacturing are becoming increasingly important in strengthening Malaysia's industrial ecosystem, according to the Malaysian Investment Development Authority (MIDA). This becomes more apparent as global semiconductor and mobility supply chains become increasingly interconnected and technology-driven.
According to BERNAMA News Agency, MIDA executive director of manufacturing development (non-resource), Ts Norhizam Ibrahim, stated that smart manufacturing has become an 'entry ticket' for companies seeking to remain competitive in the global supply chain ecosystem. He elaborated on this during the 'Digital Twin and Smart Manufacturing: Future-Proofing Small and Medium Enterprises (SMEs) in Semiconductor and Mobility Supply Chains' forum held on May 6, in conjunction with SEMICON Southeast Asia 2026.
Norhizam highlighted that customer requirements have evolved beyond conventional metrics such as ISO certification and on-time delivery, with manufacturers now expected to provide live machine data, real-time traceability, predictive defect alerts, and secure factory networks capable of integrating directly with customer systems. He added that increasing pressure from customers and financiers is accelerating the adoption of digital technologies across manufacturing operations, as companies with verified operational and sustainability data are increasingly viewed as lower-risk and more investment-ready.
He also discussed the intensifying competitive pressures with the entry of high-quality, lower-cost manufacturers challenging traditional operating models. To remain relevant, companies must transition from low-complexity assembly to higher-value activities such as design, research and development, and innovation-led manufacturing, supported by enhanced productivity and efficiency through automation and smart manufacturing.
Norhizam further noted the growing foundational relationship between the semiconductor and automotive sectors. As vehicles evolve into software-defined 'computers on wheels', demand for semiconductors, sensors, power management systems, and advanced driver assistance systems increases. Consequently, Malaysia's focus needs to shift from incentives to building a comprehensive and execution-ready ecosystem supported by talent development, cybersecurity capabilities, system integrators, and Industry 4.0 adoption.
Meanwhile, MIDA's transport technology division director, Noor Suziyanti Saad, emphasized the importance of deeper integration between the semiconductor and automotive industries, particularly with the transition towards electric vehicles (EVs). She noted that chips now account for a growing share of modern vehicle costs. Malaysia, with its strong foundations in both the semiconductor and automotive sectors, is well-positioned to enhance its competitiveness within the regional EV ecosystem by leveraging the strengths of both industries.
Noor Suziyanti pointed out that local vendors with decades of experience supplying components to original equipment manufacturers are well-positioned to upgrade capabilities and participate in next-generation EV supply chains. Smart manufacturing technologies, including advanced sensors, semiconductor integration, and intelligent systems, would be crucial in enabling safer, more energy-efficient, and connected vehicles.
She also mentioned that the government is working closely with universities, industry players, and technical agencies to address talent gaps in areas such as embedded software engineering, system architecture, and automotive electronics to support long-term industry development.