South Korea's Simmtech to invest US$120m in Penang

GEORGE TOWN (July 30): South Korean semiconductor company, Simmtech Co Ltd will be investing US$120 million (RM507 million) to set up its first factory in Southeast Asia (SEA), which will be located in Penang’s Batu Kawan Industrial Park.

SimmTech Southeast Asia managing director, Jeffery Chun, said the decision to set up its first large-scale manufacturing plant in Penang comes naturally, as the state has a well-established electrical and electronics (E&E) ecosystem, a great talent pool and an existing customer base.

“It makes a lot of sense for us to choose a region with a strong E&E background as well as access to local businesses and resources. 

“This is our first phase of investments; most of them will be made during the construction project over the next two years,” he told a virtual media briefing on the strategic investment today.

He said the semiconductor Printed Circuit Board (PCB) and packaging substrates factory in Penang would be its first in the SEA region, as the company currently only operates in its home country of South Korea, China and Japan.

Chun said construction of the factory is expected to be completed by early next year, while operations and shipments of products from the new factory is slated to commence within the first half of next year.

He said despite the COVID-19 pandemic, construction is still ongoing and the company does not foresee any major delays.

“Instead, we see this pandemic as an opportunity for the industry as the increasing trend of online meetings created stronger demand for semiconductor products…this is a great period for the semiconductor industry as a whole.

“Once it is in full swing, the production capacity (of the plant) in Penang will represent 20 per cent of Simmtech Group’s current combined capacity in South Korea, China and Japan,” he added.

Penang Chief Minister Chow Kon Yeow, who was also present during the virtual media briefing, said Simmtech’s 7.2-hectare facility in the Batu Kawan Industrial Park is expected to create 1,200 high-value jobs in engineering, manufacturing and quality management segments.

Chow said he was hopeful that Simmtech’s arrival would mark the beginning of a new chapter in the state’s link with South Korea, one of the most prominent countries in the global technology sphere.

He said as the country’s leading E&E hub, Penang continues to be a key pillar of Malaysia’s external trade, as, in 2020, the state recorded a commendable RM310 billion of exports and RM110 billion of trade surplus, accounting for 32% and 60% of the country’s total exports and trade surplus, respectively.

Chow said Penang’s E&E exports were valued at RM231 billion in 2020, which accounted for more than half of the country’s total.

On the investment front, Penang recorded outstanding investment performances for 2019 and 2020, having clocked up a total of RM31 billion worth of manufacturing investments over the said period.

E&E products accounted for 47% of the total manufacturing investments, representing 35% of the country’s total E&E investments, further entrenching the state’s position as the Silicon Island of the East.


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