Malaysia's chip industry booming amid tech shift

DW (English)

As US-China trade tensions escalate, Malaysia’s semiconductor industry is reaping the benefits. Global tech giants are shifting operations away from China, driving record investments into the country.

Transcript

00:00This is how a throne is built, not for a king but for a computer chip.

00:08High-end IC substrates are produced at this brand new AT&S factory in Malaysia.

00:17These tiny tech thrones help computer chips send and receive information.

00:23For the Austrian company, the plant in Kulim Hightech Park is a mega investment, larger

00:28in size than both of their plants in China combined.

00:33This clean room alone spans 100,000 square meters.

00:37The site will create 6,000 jobs.

00:41This boom in Malaysia is largely driven by the China Plus One strategy.

00:46This approach encourages companies to seek additional production locations to mitigate

00:51risks.

00:52China was discussed for many reasons that it's not a suitable option for AT&S anymore.

01:00We have quite a big footprint in China and it was decided that for the next growth step

01:07we want to balance our geographical footprint a bit and we looked for locations outside

01:12of China.

01:14Also some of our customers are requesting certain products not to be manufactured in

01:20China.

01:22The tech boom in Malaysia began on the island of Penang and is continuing.

01:27The so-called Silicon Valley of the East saw record foreign investment in 2023, outpacing

01:33the previous seven years combined.

01:37Advantages include political stability, a diverse and skilled workforce that speaks

01:43English, Chinese, Malay and Tamil, and a network of many multinational companies, including

01:49several from China.

01:53Malaysia on our own is a politically neutral country, we are open for collaboration from

01:59the US, we are open for collaboration from China as well, so we don't mind the geopolitical

02:04war per se, but instead what we, at least from my perspective, what I've been observing

02:11all this while is the government has been politically neutral and trying to leverage

02:14on this geopolitical war and see what we bring to the country.

02:19The professor explains that the Malaysian government has already set up a special task

02:24force to boost talent production.

02:27Thousands of engineers are needed.

02:30Malaysia is turning up the heat to move upstream, shifting from a low-cost manufacturing centre

02:36to a high-tech production hub.

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