Intel to invest RM30 bil in upgrading Penang chip factory

By The Vibes – December 14, 2021 at 7:09 PM

A version of this article was first published on the Vibes

GEORGE TOWN – Penang received an early reason for Christmas cheer following reports that pioneer investor Intel Corporation Limited is set to invest up to RM30 billion to upgrade its chip manufacturing facility at the Bayan Lepas Free Industrial Zone here.

Intel had set up its first production facility outside the United States on the island in 1972, becoming a major employer with 1,000 jobs created within the first five years.

The latest pledge by the electronics giant comes at a time when chip manufacturers are struggling to meet global demand due to disruptions to the worldwide supply chain caused by Covid-19 and the world’s rapid migration towards digitalisation.

“We are delighted that Intel Corp has decided to invest US$7 billion (RM30 billion) to expand its manufacturing capabilities in advanced semiconductor packaging technology in Penang,” Chief Minister Chow Kon Yeow tweeted today.

Intel chief executive officer Patrick Paul Gelsinger and Malaysian Investment Development Authority chief executive officer Arham Abdul Rahman plan to hold a press conference soon to disclose further details of the fresh investment.

Malaysia produces up to 13% of global chip packaging and testing. Some 7% of the world’s semiconductor trade passes through the country, with some value added at local factories where the chips are used in other products. 

Last year, the country exported electrical and electronic products worth up to RM386.29 billion, accounting for 39.3% of Malaysia’s total exports in spite of Covid-19.

A software engineer here, Lincoln Lim, said that the fresh investments will create spillover effects, as besides new job opportunities, there will likely be bulk orders for Intel’s suppliers, namely the local small and medium-sized industries.

Lim said that Penang will consolidate its position as a player in the global supply chain for chips, which are now in high demand because of the growth in digitalisation, artificial intelligence, and the internet of things. – The Vibes, December 14, 2021