Special Economic Zones in the OIC Region:
Learning from Experience
78
GDP was $6.3 billion. This equates to approximately 14% of total
manufacturing GDP within Malaysia as a whole.
It is important to note that interviews with PDC indicate that the vast
majority of manufacturing activity is contained within Penang’s FIZs and
Industrial Estates. This analysis therefore gives an indication of the
contribution Penang’s FIZs and Industrial Estates have on both regional and
national output within the manufacturing sector.
Source: Malaysian Investment Development Authority (MIDA) (2016), PDC Interviews (2017)
The success of Penang’s transformation fromunemployment of approximately 16% in the 1960s
to approximately 2.1% in 2016 70 has been underpinned by rapid expansion of the
manufacturing sector and in particular the E&E sector.
In total over 300 multinational companies have located within Penang, with the majority falling
within the E&E sectors. These companies are predominantly from Japan, Taiwan and the United
States as shown below i
Figure 14 – Origin of Multi-national Companies within Penang
Source: Invest Penang Interviews (2017)
It is estimated that Penang contributes 80% of Malaysia’s total output from back-end
semiconductor activity, demonstrating the significant contribution it makes to the sector within
the national economy. The significance of this contribution is further demonstrated when it is
considered that Malaysia contributes 10% of back-end semi-conductor output globally making
70 Malaysia Statistics Centre, (2016) Principal Statistics of the Labour Force, Pulau Pinang, 1982-2016.
29%
24% 17%
10%
3%
17%
Japan Taiwan United States Singapore Germany Others