Intel plans US$7 billion chip plant in Malaysia, expanding presence in Asia amid semiconductor shortage
- Intel is building new chip packaging facilities in Malaysia that are expected to begin production in 2024
- The US-based semiconductor giant is looking to compete with TSMC in contract chip fabrication for other companies
The company is earmarking more than 30 billion ringgit toward expanding its capacity in the country, chief executive officer Pat Gelsinger told reporters Thursday. Part of that will bankroll a new packaging plant expected to begin production in 2024, he said.
The project marks a big bet on Malaysia, which is emerging as a global centre for testing and assembling semiconductors. The US chip maker intends to shore up its capabilities in the island state of Penang, creating a sprawling complex that will serve industries from cars to electronics across Asia.
At the same time, years of global industry underinvestment and a surge in Covid-era demand for computing devices have created an unprecedented shortage of the semiconductors needed in everything from autos to smartphones. Gelsinger, who said chip demand climbed 20 per cent during the pandemic overall, expects the crunch to last till 2023.
Gelsinger was in Taiwan and Malaysia this week for talks that underscore how Asian manufacturing will be crucial to his turnaround efforts. His trip included plans for a meeting with leaders of TSMC, according to people familiar with his schedule.
Intel both needs TSMC’s advanced manufacturing services and plans to compete with the Taiwanese company in the so-called foundry business, a tricky balancing act for the CEO. Apart from Malaysia, Intel also operates a plant in Dalian, China.