Malaysia is strengthening its position in the global supply chain with the inauguration of Infineon Technologies AG’s major semiconductor manufacturing complex, according to Prime Minister Anwar Ibrahim. Speaking at the opening ceremony of the first phase of Infineon’s €7 billion ($7.7 billion) production site in Kulim, Anwar emphasized Malaysia’s technological ascent.
“We are now able to receive and expand the technology. It shows Malaysia is now going up the ladder,” Anwar stated. He also underscored the need for local government and universities to train the talent necessary to support the country’s growing chip industry. This initiative aligns with global efforts by major governments to invest heavily in semiconductor production, recognizing the strategic importance of this commodity for developing emerging technologies.
Infineon CEO Jochen Hanebeck noted that the new Kulim campus advanced ahead of schedule and is set to become the world’s largest silicon carbide power semiconductor manufacturing site upon the completion of its second phase. The facility will produce power semiconductors aimed at decarbonizing automotive, industrial, and data center sectors and is expected to generate 4,000 jobs.
Infineon’s substantial investment in Malaysia highlights the nation’s potential to attract more technological investments, especially as major semiconductor firms seek alternatives to China and Taiwan amidst geopolitical uncertainties. Malaysia has established itself as a global hub for the final packaging and assembly stages of chip production, benefitting from skilled labor, lower costs, and proximity to significant markets. Companies like Intel Corp., ASE Technology Holding Co., and Amkor Technology Inc. have leveraged these advantages, particularly during disruptions caused by Covid-19 and US-China tensions.
However, China has been emerging as a significant player in chip assembly, while neighboring countries like Singapore are also vying for multinational chip investments. In response, Malaysia has implemented policies to enhance its appeal, including $5.6 billion in incentives and the establishment of a chip-design hub near Kuala Lumpur. The country is also seeking to attract more investments in wafer production, a highly valuable part of the chipmaking process, from companies like Infineon to bolster its technological capabilities.
