AT&S, a leading tech giant, has recently opened its first production facility in Southeast Asia, located in Kulim, Malaysia. The 1.7 billion euro ($1.8bn) facility is AT&S’s largest-ever investment and is expected to employ about 6,000 workers once it reaches full capacity. The plant produces critical components, known as substrates, which act as an intermediary layer between the chips and circuit boards used in AI systems and other advanced electronics.
The decision to invest in the Malaysian facility was driven by the need for more capacity and the desire to have a footprint outside China, as well as the need for diversification of supply chains. Malaysia’s strategic location, established chip industry, and well-developed infrastructure were key factors that attracted AT&S to the country.
Malaysia, under the leadership of Prime Minister Anwar Ibrahim, aims to position itself as a leading AI hub, hoping that this will transform its economy and cement its rise from middle-income to developed status. Anwar has placed particular emphasis on the potential of AI to raise labor productivity and wages for workers.
A key plank of Malaysia’s plan for riding the AI boom involves upscaling its long-established chip industry. The National Semiconductor Strategy unveiled by Anwar’s government has allocated more than 25 billion ringgit ($5.6bn) to invest in high-value-added front-end activities over the next decade. The focus is on establishing at least 10 Malaysian firms focused on design and advanced packaging that pull in significant revenues.
Industry figures see big potential for Malaysia to build on its traditional strengths, particularly in advanced packaging, which involves the integration of multiple chips into a single casing for greater performance and functionality. While Malaysia is well-placed to exploit this opportunity, industry figures and government officials are aware of risks looming on the horizon, including the difficulty of sourcing talent.
Nevertheless, AT&S is optimistic about its future in Malaysia, with the company’s revenues forecast to reach 2.1-2.4 billion euros ($2.3bn-$2.6bn) in 2026-2027.
Source: https://www.aljazeera.com/economy/2025/3/31/as-the-us-and-china-lock-horns-malaysia-looks-to-harness-the-ai-revolution?traffic_source=rss
