Malaysia has been one of the largest semiconductor exporters since the 1980s. Entering the new millennium, this industry is still dominated by semiconductor MNCs. However, some Malaysian companies have embarked on assembly and packaging of semiconductors. They are the sub-contractors for semiconductor MNCs. Since semiconductor is both knowledge-and technology-intensive product, the capabilities to provide sub-contracting services depend critically on intellectual capital. This study is the first to examine intellectual capital in Malaysian semiconductor companies. By conducting content analysis of the companies' annual reports, it was found that a substantial amount of intellectual capital existed in these companies.
However, compared with Taiwan Semiconductor Manufacturing Company and Intel Corporation, Malaysian companies must further enhance their intellectual capital in order to climb up the technological ladder of the industry.