Malaysia ‘going up’ the chip ladder as Infineon opens US$7.7 billion plant

The Kulim semiconductor site, which is expected to create 4,000 jobs, highlights Malaysia’s potential to attract more tech investments

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Infineon CEO Jochen Hanebeck (left) and Malaysia’s Prime Minister Anwar Ibrahim (centre) during the opening of the company’s new plant in Kulim on Thursday. Photo: Bloomberg

Published: 3:46pm, 8 Aug 2024

Malaysia is gaining more heft in the global supply chain as Infineon Technologies AG opens a major semiconductor manufacturing complex in the country, the Southeast Asian nation’s leader said.

“We are now be able to receive and expand the technology. It shows Malaysia is now going up the ladder,” Prime Minister Anwar Ibrahim said at the opening ceremony of the first phase of Infineon’s €7 billion (US$7.7 billion) production site in the northern Malaysian district of Kulim on Thursday.

Anwar highlighted the need for the local government and universities to help train the necessary talent to better accommodate Kuala Lumpur’s efforts to bulk up the local chip industry. This comes as major governments around the world are spending tens of billions to bolster the domestic production of semiconductors, a commodity that is regarded as one of the most strategic goods for countries to develop emerging technologies.

Infineon Chief Executive Officer Jochen Hanebeck said that the new Kulim campus progressed ahead of its original schedule and it will become the world’s largest silicon carbide power semiconductor manufacturing site once the second phase is also completed.

The new plant will focus on making power semiconductors that can help with decarbonisation in automotive, industrial and data centre fields. It is expected to create a total of 4,000 jobs eventually, according to Infineon.

Infineon’s investments in Malaysia highlight the Southeast Asian nation’s potential to attract more tech investments at a time when major chip firms are seeking alternatives to mainland China and Taiwan for manufacturing given increasing geopolitical uncertainties.