China’s Zodiac to invest RM1.5 billion in Malaysia to build production facility for 5G chips

KUALA LUMPUR (Aug 24): Zodiac (China) Applied Science and Technology Research Centre Ltd is looking at an initial investment of as much as RM1.5 billion, as part of a larger plan to set up a manufacturing base for developing 5G chips and encapsulation technology, in Malaysia.

Zodiac, which is a high-technology enterprise with high-frequency integrated circuit (IC) design competencies, packaging and testing capabilities, and satellite receiving system design and production technology, is looking to build its second production facility on a 202.34-hectare (ha) parcel in Malaysia.

“The Group’s satellite chips are globally one of the largest selling, and have always been at the forefront of the industry in terms of technology. In response to the current international situation and market needs, the Group has decided to set up its second manufacturing base in Malaysia for developing 5G chips and encapsulation,” Zodiac group chairman Datuk Chu Boon Tiong said.

“The first phase of the production facility will be built on a plot of land, measuring 500 acres (202.34 ha), with an initial investment of RM1.5 billion,” he said.

Zodiac’s new corporate’s strategic layout and restructuring plan or new development strategy stems from the need to mitigate risks brought about by the escalating China-US tensions and the COVID-19 pandemic.  Its first facility which is located in Quanzhou, Fujian, China, has been operational since 2018. 

This endorsement of Malaysia as an investment destination hinges on the promising environment, well-developed infrastructure and sound financial system, coupled with Malaysia’s strategic location, which should help Zodiac establish an excellent global industrial chain connection.

Other than the above, Zodiac has also managed to lock in the support of the local government of the location of where the investment will be made, which promotes exports of finished products and offers preferential treatment status.

Premised on the above catalysts, the Group expects its future production capacity to exceed a whopping US$20 billion (about RM84 billion), he said.

The decision to invest in Malaysia was made after taking into consideration the regional demand for Zodiac’s products in the near future, and understanding how the Group’s competitiveness will be enhanced in the international market with the investment. This investment is also expected to see vast improvements in areas of cost control, production costs and overall efficiency.

Concurrent to its decision to invest in Malaysia, the Group has also made a breakthrough in the 5G limitation for fifth-generation mobile communication, and it has moved towards the development of the sixth-generation technology. 

Towards this end, the Group will invest approximately US$600 million (RM2.5 billion) in the near future to develop its sixth-generation communication system, which will be the catalyst for the second stage of 6G research and investment, sowing new seeds for the future of the Group.

Zodiac has received both financial and technical support from Hong Kong Blue Mountain Group and Hong Kong Headway Technology Holdings Co., Ltd for the development of its 6G technology. 

Meanwhile, the Group has also tied up with public relations and strategy company Opustique Infinity Co. Ltd for the latter to provide the requisite support and advice for the Group.

Speaking on its 6G development, Chu said: “The Group and its subsidiaries have decades of rich and unique experience in high-end chip development technology. The Group’s current high-end chip manufacturing technology and fifth-generation encapsulation for technology have been breaking through the limitations of 5G, and shifted towards 6G development.

“Going forward, the Group will establish a new vision, mission and value system, which will strengthen the Group’s in-depth exploration and development for high-end chips,” he said. 

To put things in perspective, the breakthrough of the Group's 6G technology is a new milestone for its continuous development of high-end technology, and a new revolution in the new era. 

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