Intel Corp will invest more than US$7 billion to build a new chip-packaging and testing factory in Malaysia, chief executive Pat Gelsinger said on Thursday, expanding production in the country following a global shortage of semiconductors.
The new advanced packaging facility in Malaysia is expected to begin production in 2024, he said.
The RM30 billion (US$7.10 billion) investment is expected to create over 4,000 Intel jobs and more than 5,000 construction jobs in the country, the government said.
Last month, the US and Malaysia said they plan to sign an agreement by early next year towards improving transparency, resilience and security in the semiconductor and manufacturing sector supply chains.
A global shortage of semiconductor chips, caused partly by a pandemic-fuelled demand for electronics and disruptions in supply chains has seen car makers cut production and delays in smartphone deliveries at companies including Apple Inc.
Malaysia’s chip assembly industry, accounting for more than a tenth of a global trade worth over US$20 billion, has warned that shortages will last at least two years.
“This undertaking is indeed timely given the bullish global demand driven by the chip shortages and the potential challenges arising from the recovery of the pandemic globally,” International Trade and Industry Minister Mohamed Azmin Ali said in a statement.
Intel opened its first production facility outside the US at a five-acre assembly site in Penang in 1972. By 1975, it employed about 1,000 people and had become a crucial part of the company’s manufacturing chain, its website said.