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Tech, semiconductor companies investing in Malaysia’s chip industry

Intel’s not the only manufacturer investing in Malaysia’s chip industry.
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· 3 min read

As a chip war ensues between China and the US, Malaysia is also stepping into the spotlight.

Intel announced back in 2021 that it would invest more than $7 billion in Malaysia’s chip industry, with the construction of an advanced packaging facility in Penang—becoming Intel’s largest advanced packaging facility for 3D packaging tech. Teams have already begun moving in fab tools, and Intel said the facility should be operational later this year. Around 25 miles away from Penang, Intel is also building an assembly test manufacturing (ATM) factory.

This isn’t the first time Intel has invested in the country. In 1972, it opened its first production plant outside the US in Penang, Malaysia. By 2032, it will have invested $14 billion in the country, Intel’s Aik Kean Chong, VP of foundry manufacturing and supply chain and the managing director at Intel Malaysia, said last year.

Now, with around 15,000 employees “from all the functions and business units…Intel Malaysia is truly mini-Intel,” Chong told IT Brew in an email via the Intel comms team.

Chinese, Korean, Japanese, and Western companies are all setting up shop in Malaysia, Marcel Wismer, CEO of Kemikon—a contract manufacturer to the semiconductor and high-tech industry headquartered in Penang—told the Financial Times last month. “And all of this is related to the tech war between the US and China,” he said, describing the “rush” of companies investing in Malaysia.

“Intel’s decision to invest in Malaysia is rooted in its diverse talent pool, well-established infrastructure, and robust supply chain,” Chong said. “The relatively high level of education in Malaysia is an important factor because it ensures a ready supply of qualified and trainable workers. Malaysia’s fluency in English is another compelling factor and critical for communication and collaboration internationally,” she added.

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For that reason, I’m in. In addition to Intel, Infineon and Neways have also made moves to invest in Malaysia, and GlobalFoundries opened a hub in Penang last year. The semiconductor manufacturer makes “essential chips using tech nodes that cover 80% of the global semiconductor market demand,” according to Yew Kong Tan, SVP and general manager at GlobalFoundries Singapore.

Tan told IT Brew in an email from GF’s comms team that the hub in Malaysia supports manufacturing sites in the US, Singapore, and Germany. Penang boasts a solid lineup of talent in the semiconductor industry, he says, which GF aims to use as they “continue to scale our global manufacturing footprint.”

“Long-term, we believe the semiconductor industry remains on a trajectory to double in revenue to $1 trillion in the next decade, and artificial intelligence will be the catalyst that will unlock our next phase of growth, driving up the demand for essential chips which GF produces,” he said.

More power. Infineon announced expansion plans last August in support of its goal to build the world’s largest 200-millimeter silicon carbide (SiC) Power Fab in Malaysia. Silicon carbide chips are used in “electric cars, wind turbines and other heavy applications, as well as consumer electronics,” according to the Financial Times.

IT Brew has also reached out to Infineon and Neways for comment.

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.