Malaysia h a d a fair n u m b e r o f small-scale metal engineering firms at the time o f independence in 1957. T h e local metal engineering industry o w n e d primarily by ethnic Chinese , had deve loped with growing d e m a n d f rom tin mining, infrastructure maintenance , agricultural processing and consumer industries during the colonial per i od (Rasiah 1995: chapter 3; Malaya 1957). T h e industry was mainly characterized by simple fabrication and foundry work, and operated pri - marily as backyard workshops. Loca l firms had little experience in precision engineering works and n o automated machinery deve lopment capabilities. T h e y o c c u p i e d the b o t t o m rung o f slowly evolving simple productive capabilities within the techno logy trajectory T h e technological capabilities o f these firms began to change substantially f rom the 1980s. Starting with simple backyard metal too l - ing activities, some ethnic Chinese firms in Penang began to engage in precision engineering operations in the 1980s. These firms had deve loped substantial high precision engineering and fully automated machinery manufacturing capabilities by the end o f the 1980s. By the mid -1990s , these firms had acquired original equ ipment manufacturing ( O E M ) capabilities. En g Hardware , a long with its subsidiary E n g T e c h n o l o g y 1 is one such c o n c e r n which has successfully carved out a niche in the high precision mach ine tool market.