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South Korea’s Simmtech to invest RM507m in Penang

South Korea’s Simmtech to invest RM507m in Penang

30 Jul 2021

South Korean semiconductor company Simmtech Co Ltd via its Malaysian subsidiary, Sustio Sdn Bhd (Sustio) will be investing RM507.78 million (US$120 million) to set up its first factory in Southeast Asia at Penang’s Batu Kawan Industrial Park.SimmTech Southeast Asia MD Jeffery Chun said the decision to set up the company’s first large-scale manufacturing plant in Penang came naturally as the state has a robust electrical and electronics (E&E) ecosystem, a great talent pool and an existing customer base. 

“It is fitting for us to choose this region that has 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 said at a virtual media briefing on the strategic investment last Friday.

According to Chun, the semiconductor printed circuit board (PCB) and packaging substrate plant in Penang would be its first plant in the Southeast Asian region as the company currently only operates in its home countries, namely South Korea, China and Japan.

He added that the group’s presence in Penang will be an added advantage for Simmtech in terms of the close proximity to its major customers in this region, thereby enabling greater value creation.

Chun also noted that the construction of the plant is expected to be completed by early next year, while operations and delivery of products from the new plant are scheduled to begin in the first half of 2022.

He said despite the Covid-19 pandemic situation, construction was still underway and the company did not expect any major delays.

“On the other hand, we see this pandemic as an opportunity for the industry as the growing online trend creates higher demand for semiconductor products. This is a good 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% of Simmtech Group’s current combined capacity in South Korea, China and Japan,” he said.

Penang Chief Minister Chow Kon Yeow, who was also present during the virtual media briefing said Simmtech’s 18-acre facility in the Batu Kawan Industrial Park is expected to create 1,200 high-value jobs in engineering, manufacturing and quality management segments by the first half of 2023.

He added that as part of the efforts to cement Penang’s position as a hub for advanced manufacturing, the state government had placed emphasis on attracting companies with strong commitments in developing cutting-edge technologies and sustainable investing.

Penang recorded outstanding investment performances for 2019 and 2020, having clocked up 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.

Source: The Malaysian Reserve

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