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Ng Kok Tiong, with 34 years of experience in the semiconductor industry, observes a remarkable surge of activity in Malaysia. He highlights the growing congestion between Penang Island and Kulim, showing Malaysia’s growing industrial landscape. Ng, also serving as the chairman of the Semiconductor Fabrication Association of Malaysia, notes the efforts of the government to widen roads to accommodate the influx of factories.

In Kulim, construction is underway for a massive $7 billion facility by Infineon. It is set to become the world’s largest production site for silicon carbide chips. Malaysia, historically significant for Infineon, now hosts more employees than its home base in Germany. The country, once dubbed “the Silicon Valley of the East,” aims to reclaim its status amidst global tensions by attracting investments from tech giants like Intel, set to inject $7 billion into Malaysia for chip production.

Intel’s venture in Bayan Lepas signals a shift towards advanced 3D chip packaging. It will stimulate a chain effect of investments in supporting industries. Malaysia’s appeal to foreign investors is evident in record levels of foreign direct investment, surging notably in the tech sector. However, Malaysia’s heavy reliance on foreign players poses challenges, worsened by the COVID-19 pandemic’s disruption in 2020.

Despite hurdles, Malaysia seeks to capitalize on its stable geopolitical environment and strategic location. Major players like Jabil, Micron, and Western Digital are expanding their operations. Whereas, logistics infrastructure is being bolstered to support the growing semiconductor industry.

Intel’s Chong emphasizes Malaysia’s centrality in Southeast Asia, citing logistical advantages and a proficient English-speaking workforce. ASE Tech Holding’s CEO stresses the need for diversified production bases. They will ensure supply chain resilience, prompting companies to expand in Malaysia.

Malaysia faces competition from neighboring countries and challenges such as talent shortages and access to renewable energy. However, stakeholders advocate for government support in facilitating green energy supplies. Ng envisions a prominent role for Malaysia and Southeast Asia in the semiconductor industry. This will leverage existing chip packaging and testing strengths, combined with Singapore’s expertise in front-end chip manufacturing.

As Malaysia navigates through these challenges, it positions itself as a promising hub for semiconductor production and a key player in the global supply chain.

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