- 4 months ago
The global AI boom is driving unprecedented demand for advanced chips, power semiconductors and high-performance packaging technologies. Behind that race is another critical industry: precious metals.
Malaysia already accounts for around 13% of global semiconductor testing and packaging activity, while the government’s National Semiconductor Strategy aims to channel RM25 billion into strengthening the sector. But as supply chains fragment and demand for AI hardware surges, questions around raw materials, urban mining, e-waste recycling and sustainable manufacturing are becoming impossible to ignore.
Tehmina Kaoosji speaks to Yasutaka Ihara, Director at TANAKA, on Malaysia’s semiconductor ambitions, advanced packaging, and why precious metals may become one of the most strategic components in the future global tech economy.
Malaysia already accounts for around 13% of global semiconductor testing and packaging activity, while the government’s National Semiconductor Strategy aims to channel RM25 billion into strengthening the sector. But as supply chains fragment and demand for AI hardware surges, questions around raw materials, urban mining, e-waste recycling and sustainable manufacturing are becoming impossible to ignore.
Tehmina Kaoosji speaks to Yasutaka Ihara, Director at TANAKA, on Malaysia’s semiconductor ambitions, advanced packaging, and why precious metals may become one of the most strategic components in the future global tech economy.
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00:03Hello and welcome to Niaga Spotlight with me Tamina Kausji. Niaga Spotlight takes us through
00:07the week in economic analysis and future affairs. Now today on future affairs, our spotlight falls
00:12on precious metals and the semiconductor race. Malaysia is already a serious player in the global
00:18semiconductor supply chain, contributing about 13% of global assembly, testing and packaging
00:24activity with our E&E sector accounting for over 40% of national exports annually. Now under the
00:32national semiconductor strategy, the government has committed at least 25 billion ringgit in fiscal
00:38support with targets including 500 billion ringgit in investment and 60,000 high-skilled engineers over
00:46the next decade. But as Malaysia moves into advanced packaging, AI chips and higher value
00:54manufacturing, the industry-wide sustainability question is shifting. Do we have the materials
01:00security, refining capacity and circular supply chains to support that ambition amid continued
01:07geopolitical instability? So today on Niaga Spotlight, we examine why precious metals are
01:13becoming a strategic part of Malaysia's semiconductor race. Yasutaka Ihara, Director and Corporate Officer
01:20and Head of Sales Management Department with Tanaka Precious Metals Japan, joins us now online for this
01:26crucial discussion. A very good morning to you, Mr. Yasutaka. Thank you very much for making time to
01:32join us. How are you today? Good, good. Thank you. Thank you very much for inviting us today.
01:37Fantastic. Mr. Yasutaka, if I can start off by asking you, now Malaysia already plays a really major role
01:43in semiconductor assembly and testing. And also we have a national semiconductor strategy which is aiming
01:50to push the country into more advanced manufacturing and packaging. From your vantage point and perspective
01:58at Tanaka, why should we also in this transition not only be looking at chips but also focusing on
02:05materials related issues? Because advanced packaging requires high quality products and features required
02:18for the fine pitch and high conductivity and low resistance and the reliability. Those kinds of
02:25requirements needs for the precious metal material like silver and gold and PGM materials. That's why the
02:35importance of the materials getting increased recently. Absolutely. Now precious materials are also
02:43quite critical to semiconductor manufacturing. Tell us a little more about the precious metals in
02:50particular which Tanaka side has a lot of experience in providing. Yes, for the semiconductor field we have
03:00many variety of the materials such as bonding wire and six-film paste and sparkling targets and
03:08aeroporting solution. And that's also advanced material to be developed and then delivered to the massive
03:15Malaysia also includes Southeast Asia. That's right. Now some of these metals are high precious metals. Their role has evolved
03:24from being simple conductive components.
03:27They are now central enablers of some special functions such as high power density, thermal management,
03:35as well as advanced packaging reliability. Would you be able to provide us with some insights about how the market
03:43is doing in 2026, especially given that there's quite a lot of geopolitical instability for supply chains?
03:53I see the more demand for the AI and data center demand is increasing significantly and then the most customer
04:03needs the material and then we have requested to the much more bigger volume and the short time read time
04:11and the supply chain consistency. Those kind of requirements is booming now.
04:17Absolutely. Moving along, if I could ask you, Mr. Ihara, now many advanced semiconductors today we are depending much on
04:26high purity. There is gold, there is silver, palladium and also platinum group metals. How exposed is a country like
04:35Malaysia to our geopolitical tensions, export controls and also price volatility,
04:42when actually a lot of these critical materials, when actually a lot of these critical materials are still have to
04:46be imported into countries like Malaysia before we can produce or manufacture the semiconductors?
04:54Yes. Yes, because Malaysia has a significant role in assembly of the semiconductor products. So the precious metal manufacturer like
05:06us, Tanaka, we are exporting from the material into Malaysia and also the domestically producing Malaysia.
05:14And then, but after that, but after that, the spent products or the semi-assembled scrap is not in the
05:22cycles in Malaysia at this moment. That's why the most of the material exporting to the other third country. And
05:30then in the sense, the precious metal ecosystem to be required in the near future to be controlled the material
05:40amount.
05:45Absolutely. Now, it's also interesting that the semiconductor industry did learn quite a lot due to the COVID pandemic and
05:54related supply chain disruptions, which even caused complete shutdowns in production.
06:00Would you say there are any lessons from that time, Mr. Ihara being applied today amid the kind of geopolitical
06:09instability and price volatility, which we are seeing in this year?
06:16We have learned about the COVID-19 and then some extent of the material to be recycled in our own
06:24country. And in case of Malaysia, also that kind of ecosystem to be required, of course.
06:31Absolutely. Now, there is a particular supply scarcity when it comes to silver, which is creating an increased reliance on
06:39recycling and refining. Would you be able to tell us a little bit more about Tanaka's role in particular in
06:46the supply of silver to be made available for semiconductor production?
06:52Yes. So, in case of silver and also the other materials also, we produce the precious metal, silver and gold.
07:01And in case of silver, the regular silver material and then for the material going for the semiconductor is a
07:09little bit different because of the purity.
07:11The semiconductor grade is required of the high purity, like 4.9 and 5.9, which is 99.99%. That
07:21kind of material to be produced is required of the technology, great technology to be produced.
07:29Absolutely. Now, also, Malaysia's strength historically has actually been in its openness and neutrality, but certainly there's some increased export
07:38controls and also the supply chain fragmentation, which makes it important to continue cooperations with partners such as Tanaka.
07:45Thank you for the insights so far.
09:38And, of course, there is a real cost reduction requirement, but much more the shorter delivery and for the production
09:50supply chain consistency requirement is much bigger than the cost reduction.
09:57Exactly.
09:58So it is actually going to take a balancing of these two considerations.
10:05You cannot produce such precious metals on a high demand cycle while reducing the cost
10:11as well.
10:12Insofar, have you found recipient countries, trading nations, cognizant and accepting of
10:20this reality?
10:23Sorry, could you say that again?
10:25Yes.
10:25Would you say that receiving countries which require the precious metals are all right
10:32with this reality, that you cannot reduce the material cost too much while maintaining
10:38the performance?
10:40Yes, I think so.
10:42All right.
10:42Wonderful to hear.
10:43Thank you very much for the conversation so far, Mr. Yasutaka Ihara.
10:47We take a quick break.
10:48We'll be back right after with the rest of this conversation.
11:01Welcome back to Niagara Spotlight.
11:02Still with me, Tamina Kautji.
11:04Today we're taking a deep dive into looking at precious metals and the semiconductor race
11:09with Yasutaka Ihara of Tanaka, Japan.
11:12He is joining us online right now.
11:15Back again.
11:15Mr. Yasutaka.
11:17Mr. Yasutaka, now moving on into the conversation.
11:19So we are now seeing research into alternatives for precious metals such as silver and copper-based
11:28alloys also replacing more expensive precious metals in certain semiconductor applications.
11:35Can you tell us a little bit more about this research?
11:41Yes.
11:43Actually, so we, Tanaka, have a bonding wire factory in Penang, Malaysia over the 30 years.
11:50And then, so we have been supplying bonding wire to the Malaysian or the Southeast Asian customer.
11:56And then now, based on the customer's requirement from the material cost reduction, we are trying
12:04to convert it from gold to the non-gold or the less gold material.
12:11And then in this case, we just simply using the existing production line and then simply change from the material
12:22from gold to the other material in a feasible production line.
12:28That's right.
12:29But however, could this become a competitive advantage in the new future for countries like Malaysia,
12:37who are also trying to scale our advanced manufacturing without dramatically increasing costs?
12:45Yes, I think so.
12:47Because Malaysia has already a big portion of the production equipment for the production experience so far.
12:56And then they have the enough equipment and the device is just simply combating from material to the precious metal,
13:05to the non-precious metal or the less precious metal is feasible.
13:10It's okay.
13:11Now, material sciences, Mr. Ehara, it rarely attracts public attention, but it can also influence competitiveness just as much as
13:21manufacturing scale.
13:23Are there other global interests when it comes to looking at such silver and copper-based alloys as alternatives for
13:36the semiconductor industry?
13:37Or is it mostly research and events occurring within Japan only at this point in time?
13:46Not only in Japan, because the already for the semiconductor industry is expanded globally.
13:53And Malaysia also the same situation will happen to the change into the silver and copper and also in the
14:02future, the other material.
14:05Absolutely. Now, countries that can also reduce their exposure to expensive or perhaps potentially volatile materials,
14:12there's also an opportunity to strengthen both cost resilience as well as supply security simultaneously.
14:19Mr. Ehara, moving on into, let's talk about something which is very close to the work which Tanaka has been
14:27working on.
14:28You've spoken about urban mining before. Tell us more about what this means within the context of precious metals for
14:38semiconductor manufacturing.
14:41So Tanaka, we have a precious metal production producer and also the refining company over the 140 years.
14:51And then we also have a refining factory in Japan for the other countries also.
14:57And then the precious metal is to be controlled for the circulation of the material itself.
15:02And in the material, in Malaysia also.
15:06And the future, those kinds of the ecosystem to be considered and set up for the precious metal, like silver
15:13and gold.
15:15So when it comes to the urban mining advantage, let's talk about where actually high grade electronic waste, for example,
15:25can be a part of this urban mining chain and also circular supply chains.
15:32Yes.
15:33Yes.
15:34The most of the spent product for the production scrap we see in located in Malaysia and then the initial
15:44collector to be collected material and then to be defined in themselves or just shipped to the Japan Tanaka at
15:56this moment.
15:56Absolutely.
15:58Now, just for the audience's information, it's very interesting that high grade electronic waste like discarded printed circuit boats, for
16:05example, they contain anywhere between 250 to 350 grams of gold per tonne, which is compared to traditional virgin mines,
16:15which may only be yielding one to three grams per tonne.
16:19So there's certainly a cost effectiveness impact, which comes from recovering pure copper and gold from such urban wastes.
16:28Yes.
16:29So, Mr. Ihara, now asking you this question, at a time when e-waste is rising globally, of course, as
16:37we are maturing and each time discarding so many consumer electronics, how realistic is it for Malaysia to recover and
16:49refine critical materials domestically instead of relying entirely on newly mined imports?
16:59Yes.
17:01Of course, Malaysia at this moment, there is no refining facility in terms of the precious metal, but ourselves, we
17:14are collaborating with the local refining company to set up those kinds of facilities in the future.
17:21And then so we are the first step to just technical transfer to the source company to be for the
17:31initial step on the final refining process.
17:34And then also the government is show the great interest and then some supporting all the those kinds of activity.
17:43Thank you for that insight.
17:46Thank you for that insight.
17:46When it comes to decarbonization, could you tell us a little bit more about how decarbonization is completely in line
17:54with using e-waste for precious metal extraction instead of focusing on going and sourcing from original or virgin new
18:06mines?
18:08So the simply so when we extract from the precious metal from the new mines and some number, but if
18:15we take out the precious metal for the other mine is just one twenties or one fifties of the carbonized
18:25is comes out because the other mine is much more high content of the precious metal.
18:31The content compared with the new mines.
18:36That's why the other mines scrap the refining process is to be much more important in the future.
18:43That's right.
18:44Would you say, Mr. Ihara, that there that that time instead of in the future, we ought to be seeing
18:51a more urgent, perhaps even a regional Asia Pacific movement for such urban mine recycling rather than waiting for the
19:01future.
19:01For some time in the future, given that there is so much more to be extracted from from urban mining.
19:10Yes, I think so, because, you know, the precious metal pricing recently increasing extremely.
19:18And then for the in the technical wise, the software, the lower content of the precious metal to be scrapped
19:25and then dumped away.
19:26But due to the high price, those kinds of materials, the scrap is also so valuable to change into the
19:33back of these precious metals.
19:36Absolutely. Now, just to recap that, so decarbonization is directly related because urban mining will drastically reduce energy intensity together
19:46with water stress and also toxic chemical byproducts which are associated with virgin mining operations.
19:54Urban mining, in fact, urban mining, in fact, changes the discussion from waste management into actually resource management.
20:00So, Mr. Ihara, now, of course, you had mentioned Tanaka has operated in Penang for more than three decades and
20:07has also been firsthand witness to Malaysia's semiconductor evolution.
20:13In your opinion, what does Malaysia still need to get right if we want to compete with our regional semiconductor
20:23powerhouses, not only as manufacturing base, but also for high value innovation system?
20:34I think Malaysia has already has a great position so far, but in the future, so the networking platform in
20:45the semiconductor industry for the other industry also to be considered and for like a semiconductor consortium,
20:53those kinds of organizations, those kinds of organizations to enhance the R&D for the networking in the semiconductor industry.
21:03Indeed. Now, also, perhaps we can end the conversation by looking at some of the interesting innovations when it comes
21:12to urban mining and the circular economy,
21:16which include things like AI-driven sorting and also dismantling.
21:23Everybody talks increasingly about AI in every industry.
21:28Mr. Ihara, have you seen any developments connected to automated facilities which are utilizing artificial intelligence or even advanced robotics
21:38to make the process of urban mining for precious metals extractions more feasible and, of course, more efficient?
21:50Yes, in terms of the refining process depends on the type of scrap.
21:58The process is a little bit different and complicated technology wise and we have many experience of those kinds of
22:06refining process in Japan.
22:09And then just we introduce those kinds of the technology into the Malaysia to enhance the recirculation of the precious
22:17metal recycling.
22:19Yes, indeed. It would be interesting to use all of these applications and hopefully sooner rather than later.
22:25I also happen to be reading a little about next generation extraction or eco extraction and how it applies to
22:33the precious metals industry for semiconductor.
22:37Can you tell us a little bit more what you have heard about a particular method?
22:43There's one which is one which is known as flash jewel heating or FJH, which a lot of startups and
22:49recycling firms are deploying using electrothermal methods in particular.
22:56Yes, the processes surface, the many approach of the Tanaka already have.
23:02And then and now the basic material is considered the silver and gold, but the many advanced material to be
23:10considered as precious platinum metal group, like platinum, palatium and logium.
23:16And then for those PGM materials refining, it's much more advanced technology to be required.
23:23And then so we also consider to be those process in bringing to the Malaysia in the near future also.
23:30That's right. Now, FJH technology in summation basically uses ultra fast electrical energy to volatize and recover metals instantly, which
23:39actually entirely bypasses the need for any hazardous acids, long thermal cycles and other processes.
23:47Now, overall, Mr. Ehara, before we close the segment, what would be your views for the rest of the year
23:57of 2026 when it comes to the precious metals ecosystem relating to semiconductor manufacturing?
24:07Yes, we expect it to be much more expanded for the industry.
24:15And then we have much more chance and business chance in Malaysia.
24:21Thank you very much for your insights and for joining us online from Japan.
24:25Now, Malaysia's semiconductor future will depend on talent, technology, materials, security and also the ability to build these more resilient
24:32supply chains.
24:34That's all we have time for today.
24:36And thank you again to Yasutaka Ihara, director and corporate officer and head of sales management department with Tanaka Precious
24:43Metals Japan.
24:44I'm Tamina Kausji signing off for now.
24:46Here's to a productive week ahead.
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