GEORGE TOWN – Semiconductor giant Lam Research’s investment in Penang is a major achievement for the state, as they are the first wafer fabrication equipment maker to have set up business operations with a manufacturing plant in Malaysia.
Chief Minister Chow Kon Yeow said that being one of the world’s eminent leaders in the industry, Lam Research is expected to bring a far-reaching impact to Penang, from supply chain localisation, to technical workforce skills, to economic spillover effects.
“True to its reputation as the Silicon Valley of the East, Penang is the most important manufacturing base for electrical and electronic (E&E) products within Malaysia and it is among the most vibrant hubs in the region,” Chow said at the Lam Manufacturing Malaysia Roof Topping virtual ceremony today.
“According to statistics compiled by the Statistics Department of Malaysia and UN Comtrade, Penang accounted for an estimated 5% of global semiconductor exports in 2019.
“We can expect an immense chain reaction among semiconductor-related players to explore Penang as a viable option to set up their operations here, which will further enhance the already-comprehensive and robust E&E ecosystem in the state."
The chief minister said that in terms of supply chain localisation, Invest Penang has engaged Lam Research for a “Supplier Day” to explore and understand more about the capabilities of the local industry players.
“I believe the localisation of the supply chain can create a win-win situation. Lam Research may benefit from cost and time-to-market perspectives while the local players will have a chance to penetrate into the value chain of the front-end equipment industry.
“As you are aware, Penang is already home to a host of renowned global equipment manufacturers of back-end processes," he said, adding that he was confident the addition of Lam Research will transform Penang into a regional, if not global, front-to-back-end E&E equipment manufacturing hub.
Chow said that Penang garnered approved manufacturing investments worth RM14.1 billion in 2020, the second highest in history, with 75% contributed by foreign direct investment.
“The State government is grateful to achieve such a commendable investment performance, despite a challenging year. 2020’s investment achievement reflects investors’ continued confidence in Penang as a sustainable investment location,” he said.
In 2020, the approved manufacturing investments in Penang were primarily related to the state’s key industries – namely, E&E, Machinery & Equipment, and medical devices industries.
Cumulatively, investments in these sectors accounted for 89% of Penang’s total manufacturing investments in 2020, which in turn accounted for 50% of Malaysia’s investments in these three sectors.
The chief minister said this demonstrated Penang’s instrumental role in driving Malaysia’s participation in the global supply chain in the above areas. “Aside from the state’s robust supply chain, factors such as good infrastructure, conducive living environment, and talent are equally imperative in attracting high-quality investments.
“With such a nod of confidence from Lam Research, our talent will not only be offered golden job opportunities but also the chance to gain technical know-how from the global leader in wafer fabrication equipment – all of which will further anchor Penang as the talent magnet of the northern region.
“Through Invest Penang, the state government is fully committed to provide its best possible facilitation service for Lam Research’s expansion project here,” he said.
Lam Research corporate vice president of manufacturing Mike Snell said that with its proximity to Lam’s other sites in the region, Lam Manufacturing Malaysia will serve as the Asia manufacturing hub and will play a critical role in supporting the growing customer demand for its equipment.
Lam Manufacturing Malaysia general manager Soon Kuek said that the new site will be an advanced manufacturing facility, with the flexibility for expansion of its operations if needed. “We are pleased with the quality of talent in the Malaysian workforce, and we are very confident with the team we are building. As such, we remain committed to continuously invest in developing their technical skills and capabilities,” she said in her opening speech.
Soon Kuek also said that once operational, the company will require an ongoing supply of components and materials to operate efficiently. “We are currently working with partners to ensure a significant percentage of our components are locally sourced and we believe this will also contribute to the region’s economy.”
Meanwhile, Malaysian Investment Development Authority (Mida) chief executive officer Datuk Azman Mahmud said that Mida will continue to entice more quality investments, particularly in the areas of technology and innovation to propel Malaysia to greater heights.
“Lam Research’s investment to produce fabrication equipment here will cater to the rising demands for data processing and communications application, especially for Industry 4.0 technology enablers,” he said.
“In the past five years alone, Mida has approved 106 manufacturing projects with US$12.6 billion (RM51.7 billion) investments in the state.” – The Vibes, March 8, 2021
