Intel Corp has allocated approximately $7.1 billion to invest in new chip packaging facilities in Malaysia, a significant investment aimed at intensifying its global presence and addressing the ongoing global chip shortage expected to last until 2023. Intel CEO Pat Gelsinger stated that the company is dedicating more than 30 billion ringgit to expand its capability in the country. He added that part of this funding will support a new packaging plant expected to start production in 2024.
The project represents a major bet on Malaysia, which is emerging as a global center for semiconductor testing and assembly. The American chip manufacturing company plans to enhance its capabilities on Penang Island and establish a massive complex serving industries from automotive to electronics across Asia, according to Bloomberg, as reported by Al Arabiya.
This initiative is part of a global expansion as Gelsinger aims to halt the loss of market share and customer defections partly caused by setbacks in technology upgrades. Gelsinger took over the leadership of the largest American chip manufacturer in February with a mandate to reclaim industry leadership from Asian giants like Taiwan Semiconductor Manufacturing Company (TSMC), and Intel will outline expansions in the U.S. and Europe next year.
Meanwhile, years of underinvestment in the global industry coupled with increased demand for computing devices during the COVID era have led to an unprecedented shortage of semiconductors needed in everything from cars to smartphones. Gelsinger, who noted that demand for chips surged by 20% during the pandemic overall, anticipates that the crisis will continue until 2023.
On another note, Gelsinger visited TSMC, as Intel requires advanced manufacturing services from TSMC and plans to compete with the Taiwanese company in what is known as the foundry business, which presents a challenging balancing act for the American company. Malaysia alone accounts for 13% of the global chip and packaging production, making it a key player in preparing semiconductors for cars, phones, and other devices, with Penang emerging as a hub for electrical and electronic devices in the country.
