Simmtech, a South Korean- based global leading manufacturer for Printed Circuit Board (PCB) and packaging substrate for semiconductors, has begun construction of an RM508 million first large-scale factory in Southeast Asia at Batu Kawan Industrial Park, Penang, Malaysia.
The construction is said to be on schedule despite Covid-19 disruption and is expected to complete by the first quarter of 2022. The factory will be manufacturing the region’s first packaging substrates for dynamic random-access memory (DRAM) / NAND memory chips and High-Density Interconnect (HDI) PCB for memory module / Solid State Drive (SSD) devices and operations expected to commence in the second quarter next year.
“Given the supply constraint globally, it is absolutely critical that our Penang project goes full swing to manage the supply chain. With the synergistic support from the Federal government agencies especially Malaysian Investment Development Authority (MIDA) and the State government agencies, our greenfield project is chartering in lightning speed to ramp up capacity to our major customers in this region” said Mr. Jeffery Chun, the Managing Director at Simmtech Southeast Asia.
Dato’ Arham Abdul Rahman, Chief Executive Officer of MIDA shared that “The Electrical and Electronics (E&E) manufacturing industry is rapidly evolving. More and more companies are demanding knowledge-intensive, hi-tech and innovative activities. MIDA is targeting more front-end and back-end semiconductor players as well as their supply chains to consider Malaysia as an alternative site for their production..”
The project will be invested via its Malaysian subsidiary, Sustio Sdn. Bhd. with a total investment of RM508 million will definitely benefit local businesses with opportunities to be integrated into the global value chain. The new factory in Penang is anticipated to create more than 1,000 high-skilled jobs in engineering, manufacturing, and quality management, by the first half of 2022.
The global shortage of chip is driving demand through the roof, and disruption in CHina due to Covid-19 is causing anxiety in the global supply chain. This gives Malaysia-based component makers an added window of opportunity to ramp up production and fulfill the vacuum.
Mr. Chun added, “With this co-development programme with our key customers, we are confident that our project will not only be completed in time and primed for the market but also be ready for production at full capacity as soon as we commence operations next year.” As one of the world’s largest players in the semiconductor industry, the Penang factory serving as a manufacturing plant for the region’s first packaging substrates will position Simmtech as a differentiator from our competitors, thereby jumpstarting the dynamics of global chips shortage.