This article first appeared in Digital Edge, The Edge Malaysia Weekly on August 10, 2026 - August 16, 2026

The Asia-Pacific region built its semiconductor strength on back-end assembly and testing, a model that served it well for decades. But as the industry moves up the value chain, demand has moved towards design engineers, process engineers and advanced packaging specialists; however, talent pools in the region have yet to develop at scale.

These roles sit at the intersection of design and manufacturing, says SEMI vice-president of global workforce development and initiatives Shari Liss. Such talent is in short supply worldwide, not just in Southeast Asia. SEMI is a global industry association that supports semiconductor companies in growing their businesses and addressing industry challenges worldwide.

The challenge runs deeper in Malaysia because the very skills the country is trying to cultivate are also being aggressively recruited by Singapore and Taiwan. At the same time, the industry loses about 15% of its talent annually to competing markets.

“Malaysia isn’t just needing to fill a pipeline; it also needs to fill a pipeline that is currently also draining. This does change the strategy, meaning that retention has to be designed in from the beginning, not treated as a separate problem,” she tells Digital Edge.

Liss believes that the workforce challenge extends well beyond engineers. “The challenge isn’t purely an engineering shortage. The industry needs technicians, operators, data scientists who understand fab environments, supply chain professionals and talent who can bring innovations to market. If the national strategy focuses only on engineering degrees, we will solve one piece of the puzzle and may, in the end, miss the rest.”

Under the National Semiconductor Strategy (NSS), Malaysia aims to train 60,000 skilled semiconductor professionals. While often framed as an engineering target, Liss says the industry also needs technicians, supply chain professionals, quality engineers and commercial talent alongside process engineers and integrated circuit (IC) designers.

“A strategy built only around degree-level engineering will leave serious workforce gaps that no amount of engineering graduates can possibly fill,” she says, adding that the target is achievable, provided several conditions are met.

First, workforce development requires sustained government commitment and investment in long-term infrastructure.

“The pipeline has to start well before university. STEM (science, technology, engineering and mathematics) awareness and engagement at the secondary school level is a critical piece of the workforce puzzle.

“If young Malaysians are not seeing semiconductor careers as real and attainable before they make decisions, we have already lost them,” she says.

Industry participation is equally important. Employers need to co-design academic programmes, offer apprenticeships and internships, commit to hiring graduates and provide equipment.

“During the closed-door dialogue at Semicon SEA, I heard about Malaysia’s ‘industry in campus’ model, where companies contribute funds, create internships [and] donate used equipment so universities can run realistic cleanroom training. That is a wonderful strategy and that model needs to scale,” she says.

The ecosystem needs an organisation to coordinate efforts across government, education and industry, she adds.

“A strong industry intermediary, playing the connecting role that the National Network for Microelectronics Education (NNME) plays in the US, is what can keep the system from fragmenting into disconnected or siloed programmes.”

Competing on salary alone is unlikely to solve the retention challenge. Instead, Liss says engineers need clear career progression pathways and meaningful work.

“Work that matters seems to hold people in roles. If Malaysia attracts investment in genuinely advanced work, then the work itself becomes the reason to stay. That is a retention strategy that no salary package can compete with.”

Liss adds that employee share ownership and profit-sharing can also strengthen retention by giving employees a stake in what they help build.

“Engineers who feel they are building something significant for Malaysia and who see themselves as part of the story have a reason to stay that goes well beyond a pay cheque.”

Liss also says employers must play a bigger role in upskilling because university curricula often struggle to keep pace with technological change. “Employers have to help map competencies in this work and share what those look like for the curriculum to meet the needs of the industry.”

That means apprenticeships should be designed around immediate industry needs, micro-credentials validated by employers and training institutions assessed by graduate readiness.

“Partnering with SEMI and our member companies to co-develop training programmes and apprenticeships that are standardised, industry-aligned and formally recognised by hiring companies would give Malaysia a credentialing infrastructure,” she says.

“This work requires education systems that can be flexible, a curriculum that can be continually iterated upon and hands-on learning components that help with the training.”

Beyond skills, the semiconductor industry also struggles to compete for graduates with Big Tech, software companies and artificial intelligence (AI) start-ups.

Liss says the industry has been telling the wrong story as semiconductor companies often focus on the technology itself rather than its broader impact, leaving many young people unaware that chips underpin the innovations they find most exciting.

“They see AI, climate technology and medical innovation as exciting and sexy, and, of course, they are right. What they don’t always see is that none of it, literally none of it, can exist without semiconductors. Our industry is behind everything people care about and I think in some ways we have done a remarkably poor job of saying so,” she says.

The industry’s message should shift from “come work in manufacturing” to “if you want to work on the technology that makes everything else possible, this is where you should work”, she stresses.

Liss also says the industry needs to showcase more personal success stories. “We also need to tell human stories at scale. We need stories of engineers and technicians who built careers in this industry, who moved from the fab floor to technical leadership, who came from non-traditional backgrounds and found a home here.”

SEMI is pursuing these initiatives through its Beyond Awareness campaign but its success will require sustained investment and wider adoption across Southeast Asia.

Diversity is another untapped source of talent. Women account for less than 20% of semiconductor roles globally, limiting both equity and workforce supply.

“Broadening recruitment to reach women, career changers and people from non-traditional pathways does not just serve inclusion goals. It substantially expands the pool at a moment when the industry cannot afford to leave any potential talent on the sidelines,” she says.

Ultimately, Liss believes the industry’s biggest advantage lies in giving people a sense of purpose.

“If young Malaysians understood that their country is staking a real claim in the global semiconductor value chain and that their career could be part of building that, they would have a reason to engage that no software start-up in another country can easily match.”

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