Rightways to Success

Wednesday, 15 February 2023

Malaysian Chip industry outlook remains bright, says expert

Attendees of the talk and networking session for semiconductor industry players in Penang.

MALAYSIA’S role in the global semiconductor supply chain is invaluable as the country is one of the United States’ largest semiconductor trading partners.

Semiconductor Industry Association (SIA) president and chief executive officer John Neuffer said Malaysia was also a leader in semiconductor assembly, test, and packaging.

“The Semiconductor Industry Association looks forward to continuing our work with our counterparts in Malaysia to ensure Malaysia and our industry can thrive, innovate, and realise an even brighter future built on semiconductors,” he said.

Speaking after the Malaysia Semiconductor Industry Association (MSIA) and SIA talk and networking session with MSIA members in George Town, Neuffer said in the 1990s, “the US produced 37% of the world’s chips but today, it only generates 10%.”

“The US has not kept pace with the rest of the world and it has seen chip manufacturing growth everywhere in the world except in the US.

“Chips are designed to make the US competitive and not to replace any country, not to decouple from the world but to be a competitive destination for investment along with countries like Malaysia and many others,” he said.

Neuffer noted that the long-term outlook for the semiconductor industry was still bright with the digital transformation of every industry with technologies such as the internet of things (IoT), artificial intelligence and 5G.

“Everyone needs more and more chips with the advanced growth and development of technologies worldwide.

“The good news here is that the pie will be getting bigger and the pieces of the pie will also get bigger.

“The future of the industry is bright and the CHIPS Act 2022 is not expected to badly affect the industry’s growth especially in countries like Malaysia,” he said, although the World Semiconductor Trade Statistics (WSTS) forecast a decline of 4.1% in the industry this year due to inflation pressures and weaker demand.

The CHIPS Act prohibits funding recipients from expanding semiconductor manufacturing in China and countries defined by US law as posing a national security threat to the US.

MSIA president Datuk Seri Wong Siew Hai, when asked about the recent US semiconductor policy, said, “Although the situation will add another layer of uncertainty to the outlook for the semiconductor industry, there is a window of opportunity for South-East Asian countries especially Malaysia.

“There will be opportunities to capture investments, business opportunities and sales orders as Malaysia is quite broad based.

“In cases where US factories in China have to move, we hope the volume will eventually move out to Malaysia,” he said.

Wong added that all E&E (Electrical and Electronics) companies, US companies, Chinese companies including Malaysian companies would be assessing the potential impact of the CHIPS Act and US exports control restrictions and how they could mitigate the impact.

Wong also urged the E&E industry and the Malaysian government to move quickly to seize these opportunities.

Despite Malaysia’s Electrical and Electronics (E&E) sector’s slower global growth, exports for 2022 was RM593bil, 30% higher than in 2021.

Malaysia continues to be an attractive location for E&E companies with 7% of the global market share and 13% global market share for semiconductor assembly, test and packing.

Malaysia has attracted E&E investments of RM186.2bil since January 2020 and some of the investments have started operations with more being operational this year and in 2024.

Neuffer and his team from SIA, which is the voice of the US Semiconductor Industry, were in Malaysia to meet with key relevant stakeholders including SIA member companies and those in the E&E community.

MSIA is an industry association which covers individuals and companies incorporated in Malaysia who are involved directly or related to semiconductor industry (electronics and systems), semiconductor industry supply chain, institutions providing significant related services to semiconductor industry such as engineering, finance, legal and those societies, associations, chambers and government-linked agencies. Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

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Monday, 13 February 2023

Tight job market? AI meets worker shortage

FILE PHOTO-OpenAI and ChatGPT logos are seen in this illustration taken, February 3, 2023. REUTERS/Dado Ruvic/Illustration

THE two investment obsessions of the year so far – artificial intelligence (AI) and super-tight labour markets – meet head on.

If the hype about the former is to be believed, concern about the inflationary impact of the latter should be well wide of the mark. If only they were so perfectly aligned.

Timing is everything of course. The speed with which ChatGPT-style AI tools zap swathes of white-collar desk jobs could be more glacial than any Big Tech rah-rah suggests – and at least slower than the 12-18 months of the Federal Reserve’s current policy horizon.

But two reasonable questions are being asked around investment houses.

Does the wave of layoffs in the digital and banking worlds this year relate directly to the presumed quantum leap in so-called generative AI – just as pandemic-related overstaffing and more recent job hoarding is being pared back?

And if it does, should policymakers relax more about what could be temporary worker shortages in the service sector, where most of the wage and inflation concerns seem to centre?

Far from relaxing, should office or home-based workers now fret that we’re in for anything but a tight jobs market over the coming years?

More questions than answers perhaps – but enough to have investment strategists thinking laterally and joining dots.

Morgan Stanley’s thematic research team said last week it was inundated with enquiries about generative AI during its recent client visits.

And while investment fads come and go, they said, this one is “worth considering seriously” given the speed of take-up and its diffusion across many industries.

Aside from stock price and valuation frenzies, the team said a new wave of AI fed the debate about white-collar industry disruption in a “creative destruction moment” – with possible side benefits from reskilling workers to better wage diffusion.

Citing numbers indicating employment in business, knowledge, customer and developer outsourcing in excess of 100 million across Asia alone, Morgan Stanley said the impact was already being felt even if the jury was still out on “the degree to which it is deflationary or productivity enhancing.”

If this generative AI takes the tech transformation to non-routine office work that it largely skirted over the last decade, it will affect tens of millions more jobs than currently assumed.

The two sides of the theoretical debate at least are whether that then leads to mass unemployment and demand problems – requiring a reconsideration of things like universal basic income to support economies – or whether productivity gains lift wages and see workers simply choosing to work ever fewer hours over time as bots take their place.

London-based Fathom Consulting last Thursday concluded that a “fourth industrial revolution powered by AI could greatly affect the demand for and supply of labour” and the United States and China were bound to vie for leadership.

“The speed and impact of this change will be profoundly disruptive for global politics and for the structure of the labour market,” economists Erik Britton and Andrew Harris wrote, adding that the United States needed to keep investing in tech that both supports and replaces labour in order to retain its edge.

But just what is the scale of the likely disruption?

A frequently cited study by business consultant McKinsey from 2017 showed 60% of occupations worldwide have at least 30% of work activities that could be automated – even though automation may well create more jobs in tandem.

That tallies with numbers from the Organisation for Economic Cooperation and Development, which reckoned 10% to 15% of jobs will be lost due to tech changes over the next 20 years – but about as many may be created in other industries.

While varying hugely among the 46 countries it examined, the McKinsey study said up to 30% of activities could be displaced by 2030 – with advanced and ageing economies more likely to move faster given higher wages and incentives.

More recent polling from McKinsey last year showed companies saying at least a quarter of their tasks could be automated over the next five years but less than a fifth of respondents reckoned their firms were yet in a position to do that.

And that observation underlines the timing of all this in terms of years. How soon do tech revolutions change the world – and at least aggregate demand or supply for workers?

As the flub by Alphabet’s chatbot Bard illustrated in spectacular fashion this week, the big problem for the latest wave of emerging AI is still one of accuracy.

“While ChatGPT’s output is credible, accuracy is its Achilles’ Heel,” Morgan Stanley’s team wrote. “Manual validation should act as a breakwater to this employment threat for now.”

If creases take years to iron out, perhaps it’s not so useful to see the craze providing a timely offset to tight labour markets and wage inflation.

There’s even a chance the trepidation may exaggerate the prevailing conundrum and cause as many problems as the reality.

In a discussion paper published by the Centre for Economic Policy Research last month, economists Marta Golin and Christopher Rauh said their work found a “strong relationship” between worry about automation and intentions to join a union, retrain or switch occupations, preference for taxation and government handouts, populist attitudes and voting intentions.

Much like the pandemic, fear of automation could have as big an economic impact as its actual spread. — Reuters

Mike Dolan is a columnist for Reuters. The views expressed here are the writer’s own.

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Lies, racism and AI: IT experts point to serious flaws in ChatGPT

ChatGPT may have blown away many who have asked questions of it, but scientists are far less enthusiastic. Lacking data privacy, wrong .

Lies, racism and AI: IT experts point to serious flaws in ChatGPT

ChatGPT may have blown away many who have asked questions of it, but scientists are far less enthusiastic. Lacking data privacy, wrong information and an apparent built-in racism are just a few of the concerns some experts have with the latest 'breakthrough' in AI. — Photo: Frank Rumpenhorst/dpa

BERLIN: ChatGPT may have blown away many who have asked questions of it, but scientists are far less enthusiastic. Lacking data privacy, wrong information and an apparent built-in racism are just a few of the concerns some experts have with the latest 'breakthrough' in AI.

With great precision, it can create speeches and tell stories – and in just a matter of seconds. The AI software ChatGPT introduced late last year by the US company OpenAI is arguably today's number-one worldwide IT topic.

But the language bot, into which untold masses of data have been fed, is not only an object of amazement, but also some scepticism.

Scientists and AI experts have been taking a close look at ChatGPT, and have begun issuing warnings about major issues – data protection, data security flaws, hate speech, fake news.

"At the moment, there's all this hype," commented Ruth Stock-Homburg, founder of Germany's Leap in Time Lab research centre and a Darmstadt Technical University business administration professor. "I have the feeling that this system is scarcely being looked at critically."

"You can manipulate this system"

ChatGPT has a very broad range of applications. In a kind of chat field a user can, among others, ask it questions and receive answers. Task assignments are also possible – for example on the basis of some fundamental information ChatGPT can write a letter or even an essay.

In a project conducted together with the Darmstadt Technical University, the Leap in Time Lab spent seven weeks sending thousands of queries to the system to ferret out any possible weak points. "You can manipulate this system," Stock-Homburg says.

In a recent presentation, doctoral candidate and AI language expert Sven Schultze highlighted the weak points of the text bot. Alongside a penchant for racist expressions, it has an approach to sourcing information that is either erroneous or non-existent, Schultze says. A question posed about climate change produced a link to an internet page about diabetes.

"As a general rule the case is that the sources and/or the scientific studies do not even exist," he said. The software is based on data from the year 2021. Accordingly, it identifies world leaders from then and does not know about the war in Ukraine.

"It can then also happen that it simply lies or, for very specialised topics, invents information," Schultze said.

Sources are not simple to trace

He noted for example that with direct questions containing criminal content there do exist security instructions and mechanisms. "But with a few tricks you can circumvent the AI and security instructions," Schultze said.

With another approach, you can get the software to show how to generate fraudulent emails. It will also immediately explain three ways that scammers use the so-called "grandchild trick" on older people.

ChatGPT also can provide a how-to for breaking into a home, with the helpful advice that if you bump into the owner you can use weapons or physical force on them.

Ute Schmid, Chair of Cognitive Systems at the Otto Friedrich University in Bamberg, says that above all the challenge is that we can't find out how the AI reaches its conclusions. "A deeper problem with the GPT3 model lies in the fact that it is not possible to trace when and how which sources made their way into the respective statements," she said.

Despite such grave shortcomings, Schmidt still argues that the focus should not just concern the mistakes or possible misuse of the new system, the latter prospect being students having their homework or research papers written by the software. "Rather, I think that we should ask ourselves, what chances are presented us with such AI systems?"

Researchers in general advocate how AI can expand – possibly even promote – our competencies, and not limit them. "This means that in the area of education I must also ask myself – as perhaps was the case 30 years ago with pocket calculators – how can I shape education with AI systems like ChatGPT?"

Data privacy concerns

All the same, concerns remain about data security and protecting data. "What can be said is that ChatGPT takes in a variety of data from the user, stores and processes it and then at a given time trains this model accordingly," says Christian Holthaus, a certified data protection expert in Frankfurt. The problem is that all the servers are located in the United States.

"This is the actual problem – if you do not succeed in establishing this technology in Europe, or to have your own," Holthaus said. In the foreseeable future there will be no data protection-compliant solution. Adds Stock-Homburg about European Union data protection regulations: "This system here is regarded as rather critical."

ChatGPT was developed by OpenAI, one of the leading AI firms in the US. Software giant Microsoft invested US$1bil (RM4.25bil) in the company back in 2019 and recently announced plans to pump further billions into it. The concern aims to make ChatGPT available to users of its own cloud service Azure and the Microsoft Office package.

"Still an immature system"

Stock-Homburg says that at the moment ChatGPT is more for private users to toy around with – and by no means something for the business sector or security-relevant areas. "We have no idea how we should be deal with this as yet still immature system," she said.

Oliver Brock, Professor of Robotics and Biology Laboratory at the Technical University Berlin, sees no "breakthrough" yet in AI research. Firstly, development of AI does not go by leaps and bounds, but is a continuing process. Secondly, the project only represents a small part of AI research.

But ChatGPT might be regarded as a breakthrough in another area – the interface between humans and the internet. "The way in which, with a great deal of computing effort, these huge amounts of data from the internet are made accessible to a broad public intuitively and in natural language can be called a breakthrough," says Brock. – dpa

By Oliver Pietschmann, Christoph Dernbach

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