AUSTRIAN tech giant - Austria Technologie & Systemtechnik (AT & S) Sdn Bhd is confident its products would not be undermined by the threat of import tariffs from the United States (US) due to the growing importance of Artificial Intelligence (AI).
Though there is a possibility of tariffs being imposed on its integrated circuit substrates, executive vice-president for microelectronics business, Ingolf Schroeder cites two factors which will allow it to mitigate the tariffs.
First, is that AT & S does not export directly to US from its plants in Kulim, Kedah.
Rather it manufactures the substrates directly for its sole customer here - the American global semiconductor giant - Advanced Micro Devices (AMD).
Secondly, the substrates are an important feature for the AI industry, which is emerging as a big tech force on the global marketplace, said Schroeder.
Hence, the threats of tariffs are not being experienced by the company in Malaysia although AT&S's customers might re-strategize its supply chain in the future with the release of semiconductor and packaging capacities in the US to the market – that which may require AT&S to adjust its strategies.
He does not see a slowdown in the global semiconductor market due to the emergence of AI in a big way, which can offset the negativity of tariffs on the global trade.
Schroeder's remarks are interpreted as a boost for the Malaysian tech sector which is now wading in uncertainty due to the threats of US tariffs.
Schroeder told this to the media during the start of its high-volume manufacturing at its production facility in the Kulim High Tech Park in Kedah.
In a media briefing with his colleague AT & S senior vice-president and managing director Yap Suan See, Schroeder said that the supply chain for AI should continue to stream along in line with the demand for it.
He also spoke of the company's pride in establishing its substrate production facility in Malaysia, which is the third after Leoben (Austria), Chongqing (China) and Kulim (Kedah).
It also has a presence in India, which produces elements for other tech areas such as automobiles and medical, while also offer sales support services.
Yap, who heads the Malaysian operations, also beamed with pride that the facility in Kulim employs 100% Malaysian staffers.
AT & S is also collaborating with local public institutions of higher learning and vocational education and training (TVET) centres to produce the right talent for its tech.
Malaysia has become a critical manufacturing base for AI and high-performance computing, she underlined.
Yap also said that the company sends its technical staffers to local institutions to develop a curriculum to include engineering the high-end substrates, which is defined in science and technology as a base material on which processing is conducted.
Yap also noted that universities do not offer specialised courses related to IC substrates, a critical component used in semiconductors, smartphones, industrial electronics, automotive systems, medical devices, and AI hardware.
Hence, there is a wide opportunity for Malaysians to learn via the transfer of technology.
AT & S currently has 1,500 employees at its 255,000-square-metre site in Kulim, which is part of its first phase.
The firm has invested over RM5 billion in its Malaysian facility, part of a broader RM8.5 billion phase 1 development plan involving two production sites, including RM600 million for research and development (R/D).
There is room for R&D expansion under phase one but it was held back in recognition of the global marketplace situation.
The future is also a cause for optimism for the Austrian - headquartered tech firm, as its products can help in the push for automation and next generation of tech applications. - May 8, 2025.
