SUNWAY COLLEGE JOHOR BAHRU

AUSTRALIAN MATRICULATION
ECONOMICS YEAR 11

MICROECONOMICS
-DEMAND AND SUPPLY

TITLE: THE DOMESTIC ELECTRICAL AND

ELECTRONICS (E&E)

PREPARED BY
JASHMEENAL MOHAN (22100291)

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TABLE OF CONTENT:

Front page…………………………………………..1

Table of content……………………………………2

Article………………………………………………..3

Article………………………………………………..4

According to the article………………………….5

Supply & demand graph…………………………5

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The domestic electrical and electronics (E&E) sector is expected to continue
maintaining its uptrend momentum despite predictions made by analysts that the
industry's demand has reached its highest point.

KUALA LUMPUR: The domestic electrical and electronics (E&E) sector is expected to
continue maintaining its uptrend momentum despite predictions made by analysts that the
industry's demand has reached its highest point.

Local E&E players said global semiconductor sales are still on an uptrend, although demand
for consumer products such as smartphones and personal computers is moderating due to
various factors such as inflationary concerns, recession risk and the impact of the China
lockdown.

Kelington Group Bhd chief executive officer Raymond Gan said the industry is currently
undergoing an 'inventory adjustment' after years of rapid capacity expansion in the
semiconductor and electronics industry.

He said that although lead times for semiconductor chips and equipment have reduced, they
are still high compared to pre-pandemic levels. This signifies that the shortage still remains.

"However, higher-end chips used in new technology applications in electronic vehicles,

autonomous driving, 5G and the Internet of Things (IoT) remain strong.

"Over the long term, surely demand for semiconductors and electronics will definitely rise
due to its growing importance in our digital world," he told The New Straits Times.

Gan said the global semiconductor players would continue to expand production capacities
to meet the growing demand for semiconductor chips.

"At Kelington, we see many tender invites from semiconductor companies setting up new
fabrication lines or expanding their existing lines.

"From our tender book of RM1.5 billion, almost 50 per cent are from projects in China,
followed by 28 per cent in Singapore. 

"With operations in Malaysia, Singapore, China and Taiwan, Kelington has benefited from
the capacity expansion of the various global semiconductor and electronics companies in
these countries," Gan said.

CGS-CIMB Research, in a recent sector report, opined that shipments of E&E products
would start to come down in the quarters ahead.

The research firm said global demand for semiconductors has eased as the sector's
business cycle likely peaked, indicating more normalised demand in the E&E product space.

Quoting US-based technological research and consulting firm Gartner Inc report, JF
Technology Bhd managing director Datuk Foong Wei Kuong said the shipment of mobile
phones and consumer electronics would fall in 2022 due to a culmination of geopolitical
tensions, rising inflation and supply chain disruptions that have dampened consumer
demand worldwide.

He said this would, in turn, slow down the growth of global semiconductor sales going
forward.

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"Against this challenging backdrop, we are confident that our proven resilient business
model with recurring and compounding sales of test consumables will provide crucial support
to us.

"The fact that we serve a multitude of clientele industries certainly helps diversify our risks as
well," he said.

"Regarding the global supply chain disruptions, the situation has been

manageable thus far for us. However, on a positive note, it has been improving with material
lead time gradually returning to normal," Foong said.

XTS Technologies Sdn Bhd founder and managing director Xteven Teoh Hoe Seong (subs:
name spelt correctly) expects demand to start recovering in the first or second quarters of
2023 from the lingering effects of the Covid-19 pandemic on demand, China's slowdown and
the Russia-Ukraine War.

"From what we have observed and from speaking to industry players, there is an expectation
that the global supply chain will recover gradually into 2023, but this will be selective within
the subsectors of the manufacturing sector.

"In particular, we have been told that there is still demand for automation products while
certain E&E products may see less demand," he said.

Teoh said there are still opportunities to fulfil demands and expressed confidence that
consumer sentiment will gradually return and businesses will be able to capitalise on
opportunities.

"In my opinion, to mitigate or buffer a slowdown, all businesses, particularly those that are
technology-intensive, should focus on research and development that can be
commercialised to offer the market choice. This is true, especially for consumer electronics
and other E&E products.

"Given the importance of semiconductors in our exports and the critical role it plays in the
manufacturing ecosystem in the country, Malaysia will definitely be affected, but so will other
countries in the semiconductor value chain," Teoh said when asked about supply chain
disruptions in the E&E space.

Kobay Technology Bhd chief executive officer and managing director Datuk Seri Koay Hean
Eng said that despite the global supply chain shock and labour shortages, the company
continues to receive huge orders from semiconductor, E&E, and aerospace customers.

"While we acknowledge certain global headwinds going forward, our high-precision

manufacturing business enjoyed a breakthrough year on the back of higher technology
usage worldwide and the reopening of economies," he said.

Koay said that apart from the semiconductor, E&E, and aerospace customers, the company
also sees orders from oil and gas (O&G), medical, and life science sectors.

Publication date:12/09/2022

Article link:https://www.nst.com.my/business/2022/09/830496/ee-sector-going-strong

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According to the article, the domestic electrical and electronics (E&E) sector expected to be
more rising in industry demand which can reached in the highest point. But some of the local
e&e are still on rising even certain consumer products such as technologies and many more is
moderating due to varieties of factors such as rescission risk and the main cause of impact of
china lockdown. One of the officer named Raymond Gan said that a few of the industry are
undergoing inventory adjustment after those years of rapid capacity development. Not only that, he
said that lead times for semiconductors chips and equipment have become less but they are still high
compared to before this pandemic happened. Furthermore, over the long period absolutely the rising
in demand semiconductors is importance because of the digital world. So due to over rising to
the products of e&e, the shipment of the products would start to come down in the quarters ahead
that told by some of the CIMB researchers. When the business cycle likely peaked, the demand in the
e&e product space would be normalised. “The shipment of the phones and consumer would probably
fall due to culmination of geopolitical tensions and supply chain disturbance that will cause dampened
consumer demand worldwide.” Besides that, this would slow down the growth of global
semiconductors sales that been going forward. After this been happened, there is a conversation
between XTS technologies and managing director Xteven Teoh Hoe Seong so they told that there is
an expectation that the global supply will recover gradually after one year. In particular, the
technologies have been told that there is still demand for automation products while certain products
may see less demand. Teoh said there are still opportunities to fulfill demand and expressed
confidence that consumer sentiment will gradually return businesses. Overall in my point, there is a
increasing demand and decreasing demand so it really depends on over surrounding environment.
During the impact of covid-19 the demand was moderate due to less business but during those
normal days the demand still high. The factor mostly affected is the environment surrounding us.
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Supply and demand curves are graphs that are representing this relationship
between price and quantity in supply and demand. On this y-axis, plot the price and
the x-axis plot the quantity. A supply curve demonstrates the law of supply, that as
prices increases, quantity increases.