Sarawak Deputy Chief Minister Dr George Chan Hong Nam had to rely on some help from his boss when he took a question from the state's sole opposition member during his winding-up speech in the Legislative Assembly on Tuesday.

Chan was replying to Chiew Chin Sing's (DAP-Kidurong) suggestion that the state-owned RM3.8 billion wafer fabrication plant, 1st Silicon (Malaysia) Sdn Bhd, was facing problems.

Chiew then asked how 1st Silicon was going to adjust to the fast-changing technology in the wafer foundry business, especially as the industry is now migrating from 0.25 micron to 0.18 micron.

As Chan appeared unsure how to answer the question, Chief Minister Taib Mahmud - who was seated next to him - whispered something into his ears, upon which Chan replied that there was still a demand for 0.25 micron microchips.

During the debate on the Supply (2002) Bill 2001, Chiew had called on the government to be more transparent with regard to its massive investment in the wafer foundry and to elaborate the steps taken if the company was indeed facing problems.

There is also talk that 1st Silicon is encountering serious internal problems, especially with the German contractor which built the plant, and that it is having problems selling its products because of claims that its present technology does not meet new market demand.

Economic slowdown

In his winding-up speech today, Chan, who is also minister of finance and public utilities and minister of industrial development, acknowledged that the electronics industry was affected by the economic slowdown.

However, he said there was a market for 1st Silicon's chips.

"Sharp Corporation of Japan is still placing orders for the company's products. The market outlook for 1st Silicon is promising."

Chan added that the state government - which has a 96 per cent equity stake in the project - and the company's board of directors are monitoring 1st Silicon's performance and the global semi-conductor market very closely.

He said, "The government is aware of the risks associated with the industry which needs to elevate the skills of our engineers and to bring back our local talents from overseas."

But he was confident that 1st Silicon would be able to weather the present industry slowdown.

"When the market conditions improve, 1st Silicon will be successful and bring immense benefit to the country."

TONY THIEN is a malaysiakini correspondent based in Kuching, Sarawak.