Korean semiconductor company sets up RM508m plant in Penang

·3-min read
An artist's impression of the new plant in Penang. — Picture courtesy of Simmtech
An artist's impression of the new plant in Penang. — Picture courtesy of Simmtech

GEORGE TOWN, July 30 — A Korean semiconductor company, Simmtech Holdings Inc, is setting up its first plant in Malaysia with a RM508 million (USD120 million) investment in Penang.

Simmtech Southeast Asia Managing Director Jeffery Chun said construction for the new plant on an 18-acre site in Batu Kawan Industrial Park started in May this year.

“We have spent many years looking for a suitable location for our expansion before deciding on Penang,” Chun said during a joint virtual press conference with Penang Chief Minister Chow Kon Yeow.

He said the company chose Penang due to its well established electrical and electronics (E&E) ecosystem and background.

He said the facility in Penang will be the company’s first large-scale factory in South-east Asia and it will bring its products closer to its major customers in this region.

“Once in full swing, the production capacity in Penang will represent 20 per cent of Simmtech Group’s current combined capacity in Korea, China and Japan,” he said.

Construction on the new Simmtech plant in Batu Kawan, Penang started in May this year. — Picture courtesy of Simmtech
Construction on the new Simmtech plant in Batu Kawan, Penang started in May this year. — Picture courtesy of Simmtech

He said the construction of the new facility in Penang is expected to be completed early next year and production will start soon after in the middle of next year.

He said the company does not foresee any major delays in the project despite the ongoing Covid-19 pandemic but they will closely monitor government announcements and guidelines with regards to the protocols and SOPs.

“This pandemic provides more opportunities for the industry as it is a good period for the semiconductor industry as a whole,” he said when asked about the impact of the pandemic.

He added that the plant in Penang would further strengthen Simmtech’s dominant market position and meet heightened demand from DDR5 DRAM (Double Data Rate 5 Dynamic Random-Access Memory) as well as data storage devices and packaging substrate products.

Penang Chief Minister Chow Kon Yeow at the virtual press conference today. — Picture courtesy of Penang Chief Minister's office
Penang Chief Minister Chow Kon Yeow at the virtual press conference today. — Picture courtesy of Penang Chief Minister's office

Chow said Simmtech’s new facility, via its Malaysian subsidiary, Sustio Sdn Bhd, is expected to create 1,200 high value jobs in engineering, manufacturing and quality management by the first half of 2023.

“I am excited to welcome Simmtech, the first major Korean investor from the semiconductor industry in Penang,” he said.

He hoped that Simmtech’s arrival would mark the start of a new chapter with Korea.

Other than Simmtech, Chow said a number of other global heavyweights in the semiconductor value chain have announced new investments and expansions in Penang over the last two years.

“Simmtech’s Sustio project will bring Penang’s industry to greater heights and further integrate Penang into the global semiconductor supply chain,” he said.

Chow said Penang recorded RM310 billion of exports and RM110 billion of trade surplus, which contributed 32 per cent and 60 per cent of the country’s total respectively, in 2020.

“Notably, Penang’s E&E exports were valued at RM231 billion in 2020, which formed more than half of the country’s total,” he said.

On the investment front, Chow said Penang recorded a total RM31 billion manufacturing investment for 2019 and 2020, among which 47 per cent is contributed by E&E products which represent 35 per cent of the country’s total in E&E.

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