Intel’s RM29.5b investment aimed at building rich ecosystem

by ANIS HAZIM / pic credit: Mida

INTEL Corp’s investment of US$7 billion (RM29.47 billion) in Malaysia’s facility is aimed to build a rich ecosystem for the country.

Its CEO Patrick P Gelsinger (picture; left) said Intel has started working with the local ecosystem and expects to continue to have more contractors and partners in the project.

According to him, the investment for the next ten years will include a variety of investments and part of it will be used for expanding Intel’s existing capacity.

“We will also be adding another location as well to our facilities in Penang. Our work here already includes research and development (R&D) and we will be expanding the R&D work in the country,” he said.

He noted that the facility will be utilised for the company’s back-end functions for the manufacturing process such as design, packaging, assembly, test and simulation of its products.

He said the new facility in Malaysia will involve Intel’s advancements in packaging technologies for semiconductors and is expected to commence in 2024.

Senior Minister and the Minister of International Trade and Industry Datuk Seri Mohamed Azmin Ali (centre) who was also present at the press conference said the huge investment will clearly benefit the country and create more high-quality jobs

“This is also in line with our National Investment Aspirations when we are working very hard through the Malaysian Investment Development Authority (Mida) to attract high-quality investments and high technology,” Mohamed Azmin said.

He noted that the investment is expected to create over 4,000 high-quality jobs and over 5,000 construction jobs in the country.

“Recently, we have signed a memorandum of understanding with Intel witnessed by the prime minister, where we have agreed to build talents among our local players and also our local talent.

“We are also discussing capacity building, transfer technologies and creating more jobs. So, these are the benefits of working together,” he added.

In the 12th Malaysia Plan, the electrical and electronics (E&E) industry has been identified as among the high impact industries that are key to realigning Malaysia’s growth in a sustainable trajectory while strengthening the nation’s position in the global supply chain.

The government aims for the E&E industry to move up the value chain through stronger adoption of advanced technologies, which fits well into global Intel’s overall growth strategy.

Moreover, E&E sector in Malaysia has surged to RM47.1 billion in the first half of 2021 (1H21) from RM5 billion last year in approved investments.

In a statement, Mida said foreign investments for the country have made up nearly 98% or RM46 billion for the industry alone.

“These approved projects are anticipated to generate over 9,700 new employments, including skilled positions for engineers, specialised quality controllers and highly skilled technicians,” stated Mida.

The Intel’s investment in Penang comes after Austria-headquartered semiconductor manufacturer AT&S Austria Technologie & Systemtechnik AG decided to invest RM8.5 billion to set up a production plant in Malaysia, its first in South-East Asia.

The construction of the facility in Kulim Hi-Tech Park in the northern state of Kedah is scheduled to begin in 2H21 and commercial operations are targeted to commence in 2024.

AT&S, which makes high-end printed circuit boards and integrated circuit substrates used in mobile devices, industrial electronics, automotive applications as well as medical and health technology, has production facilities in Austria, India, China and South Korea.

More semiconductor companies all over the world are increasingly boosting investments driven by massive chip shortage caused by lockdowns all over the world because of the Covid-19 pandemic.

Recently, Taiwan Semiconductor Manufacturing Co engaged in initial talks with German government about potentially establishing a plant in the European country.

According to Bloomberg, the discussions come as the European Union and others seek to increase domestic chip production to mitigate future supply chain disruptions.