The semiconductor industry in Penang: Implications for the new international division of labour theories

The Practice of Industrial Policy

“…A few developments assisted the rapid recovery and subsequent expansion of the electronics industry in Malaysia. While the production experience of more than a decade was useful when the cyclical recovery began in the industry in 1987, appreciation of the Yen, Won, the New Taiwan dollar, and the Singapore dollar following the Plaza Accord of 1985, and the withdrawal of the Generalized System of Preferences (GSP) in February 1988 (from Korea, Taiwan, Hong Kong, and Singapore) acted as a major driver of FDI outflow from these countries to the market economies of Southeast Asia (Rasiah 1988). Meanwhile, following negative GDP growth rates recorded in 1985-6, the Malaysian government devalued the Ringgit and extended the investment tax credit to electronics MNCs.…”

“…Except for the cyclical fluctuations associated with the industry-wide boombust cycles (Rasiah 1988), employment rose in the electrical-electronics industry in trend terms from 1970 until 1984 (Malaysia 1986). The industrywide crisis of 1984-5 resulted in a fall in employment.…”

“…The acquisition of VLSI technology offered the opportunity to skip stages in the technological ladder but the lack of leaders to manage the process gave Silterra no opportunity to embark on a clear catch up path. Yet, Rasiah (1988) had demonstrated how crises have given opportunities for latecomer firms, such as Samsung Semiconductor and TSMC to catch up.…”

“…The electrical-electronics industry grew rapidly in Malaysia following the opening of FTZs in 1972 (Lim 1978;Rasiah 1988). Three waves of relocation took place in the industry, namely, in 1972-4, 1988-93, and 2005-8 (Rasiah 2010.…”

Introduction

“…World Bank, 1993), the state-capital approach (see Yoshihara, 1988;Jesudason, 1989;Jomo et al, 1997), the classical Marxist approach (e.g. Rasiah, 1988Rasiah, , 1997Limqueco, McFarlane and Odhnoff , 1989;Rodan, Hewison and Robison, 1997), neo-Marxist approaches (e.g. Jomo, 1986) and structural functionalist and populist approaches (e.g.…”