Intel Is Building Its Largest 3D Chip Packaging Facility In Malaysia

In the global semiconductor value chain, Malaysia has always been a global center for testing and assembling – and no-one knows that better than Intel Corporation. Intel has been in the Southeast Asian nation for the last 51 years, with Malaysia opening Intel’s first international manufacturing facility in 1972.

Source: Techwireasia.com

In December 2021, the company renewed its commitment, that includes a US$7 billion investment over the course of a decade, bringing the total investment in Malaysia by the US chip giant to US$14 billion as of 2032. The US$7 billion in investments is mainly to increase the size of its operations in Penang and Kulim, Kedah.

As it is, Malaysia is Intel’s largest offshore site, with a workforce exceeding 10,000 employees across two campuses in Penang and Kulim. It is one of the largest assembly and test facilities, and a mature site with multi-functions in manufacturing, design, development, and local and global support services.

It has just been revealed that another factory being built in Penang will be Intel’s first overseas facility for advanced 3D chip packaging, known as Intel’s Foveros technology. Malaysia will eventually become Intel’s largest production base for 3D chip packaging, Robin Martin, Corporate Vice President for Manufacturing Supply Chain and Operations, told the media. 

The company, however, did not specify when the facility would begin mass production. A report by Nikkei Asia quoted Intel saying that Amazon, Cisco, and the US government have committed to using its advanced packaging technology.

The company is also building a chip assembly and testing factory in Kulim for its US$7 billion expansion in Malaysia. For context, Malaysia is currently the world’s sixth-largest exporter of semiconductors, and Intel contributes an average of 20% of its total semiconductor exports annually.

Malaysia alone accounts for 13% of the world’s chip testing and packaging, a critical step in reading semiconductors for cars, phones, and other devices. Penang has emerged as the nation’s electrical and electronics hub.

Over half a million people were employed in the E&E industry as of 2022, working with global chipmakers from STMicroelectronics NV and Infineon Technologies AG to Intel and Renesas Electronics Corp.

Intel In Asia

Since Pat Gelsinger took the helm, Intel has viewed Asia more prominently, while being aware that the US needs to catch up to be on par with its Asian rivals. Even in Vietnam, Intel took a giant step into the country as the first and largest major foreign high-tech investor about a decade ago. 

By the end of 2021, Intel had injected a total of US$1.5 billion in Vietnam, and there had been talks that the US chip giant was planning a significant increase in that existing investment. The aim is to expand its chip testing and packaging plant in the Southeast Asian nation, two sources familiar with the matter told Reuters.

The possible move, which one source said could be worth around US$1 billion, would signal a growing role for Vietnam in the global supply chain for semiconductors as companies push to cut reliance on China and Taiwan because of political risks and trade tension with the US. Gelsinger also believes that it is not “palatable” that so many computer chips are made in Asia.

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