and that during the same period, the number of Japanese FDI in Malaysian E&E industry increased more than 4 times (from 12 to 51 cases).

### 4.3 Trend of Production and Export

Malaysia is today among the world's top producers of room air conditioners and semiconductors. Table 4.4 shows the evolution of physical production for some of the most important electronics items for Malaysia during the 1980s. Room air conditioners increased 5.3 times from 1982 to 1990, when around one million of pieces were produced. Among consumer electronics, the production of radio receivers grew 10.5 times and that of television sets 8.7 times: in 1990 Malaysia produced more than 2 million TV sets. The growth of industrial goods was limited, while that of microelectronics was continuously high. During the eight years observed, the production of integrated circuits increased 2.8 times, that of semiconductors 1.5 times and that of transistors 2.7 times.

Table 4.5 presents the export trend of Malaysian E&E industry. In 1970, E&E industry accounted for only 8.5% of total manufacturing exports. This share increased fastly: in 1975 it was more than 25%, in 1985 shifted to 52.1% and finally in 1990 reached 56.2%. Until 1985, export of electronic components was dominant, but since 1986 its relative share started to decrease, while export of consumer and industrial goods were increasing.

The performance of Malaysian electronics industry during the second half of the 1980s, is presented in table 4.6. Growth rates of employment, output and export are impressive as in the five years considered, the industry has developed at a very fast pace. In 1990, the industry employed 144,000 workers (about 12% of total manufacturing employment), showing a more than 2.5 times increase from 1986. In the same year, output was more than 20 billion ringgits, while it was only 6.5 billion ringgits in 1986: the average annual growth was around 33%. A similar increase was also marked by electronics exports, which shifted from 7.1 billion ringgits in 1986 to more than 22 billion ringgits in 1990 (around 47% of total manufacturing exports).

The structural composition of production and export is similarly marked by a substantial change. The relative share of electronic parts is decreasing, while those of consumer and industrial goods are increasing. Moreover, the share of industrial goods is growing faster than that of consumer goods. In particular, in 1986 the electronic parts sub-sector contributed to 81.5% of the total output and to 81.7% of exports. In 1990, these shares decreased respectively to 57.6% and 52.9%. On the contrary, for industrial goods' shares there was an increase from 6.2% to 19.2% in production and from 5.6% to 22.2% in export. Also consumer goods increased from 12.3% to 23.3% in production and from 12.7% to 24.9% in export shares.

To summarize, until 1985 Malaysian industrial structure for electronics was presenting the above mentioned main peculiarities. The presence of foreign MNEs was dominant and there was a clear dualism between the production of home appliances (for the internal market) and semiconductors (totally destined to be exported). Manufacture of industrial equipment goods was limited to a few items and domestic producers, only firms of medium and small dimension, were partially operating as part suppliers. The strategy followed by the government shifted from import-substitution to export-expansion and by means of advantageous investment packages was able to attract massive flows of foreign capitals. The