The Kulim Hi-Tech Park (KHTP) in northern Malaysia has drawn two major foreign hardware manufacturing projects this year, signalling the south-east Asian nation’s allure as an electronics and semiconductor hub.

Chinese solar module manufacturer Risen Energy will invest RM42.2bn ($10.1bn) over the next 15 years to build a mega factory in KHTP. The project is expected to create 3000 jobs, including 800 managerial, technical and supervisory positions.

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Leon Chuang, a marketing director at Risen Energy, tells fDi that the new photovoltaic (PV) factory at KHTP will increase the company’s production capacity and “diversify the global supply capability, which is crucial for Risen Energy to [maintain] its sustainable, stable and rapid development in the future”.

Mr Chuang notes that while demand is expected to grow, with more than 266 gigawatts’ worth of new annual PV installations expected globally by 2025, Risen Energy has been impacted by US restrictions on Chinese PV products.

“Some European policies have also affected the development of China’s exports overseas,” he adds. 

The investment is the Chinese company’s first in south-east Asia and the most capital-intensive project ever recorded by investment tracker fDi Markets in the electronic components sector. A 10-year income tax exemption was offered to Risen Energy by the Malaysian government, subject to conditions.

Chip cluster

Austria-based AT&S, a manufacturer of printed circuit boards and substrates for semiconductors, also announced plans to invest RM8.5bn into a substrates facility at KHTP. The project is expected to create 5000 jobs.

“KHTP is a well-developed park, where important players from the high-tech sector are already present,” an AT&S spokesperson told fDi, adding that the park has a good track record going back more than 30 years, with a focus on the electronics industry.

The proximity of the supply chain, suitable infrastructure at the park and a well-developed airport, road network and seaports were other deciding factors, said the spokesperson. KHTP is home to other semiconductor players, such as AIC, and sits within the Northern Corridor Economic Region (NCER), which has suppliers for chipmakers such as Europe’s STMicroelectronics and Infineon. 

Both AT&S and Risen Energy intend to undertake significant research and development (R&D) at their planned KHTP facilities.

Park expansions

Kulim Technology Park Corporation (KTPC), the developer and manager of the industrial park, has vowed to expand its offering to create a stronger ecosystem for existing and prospective companies.

“To cater to our tenants and overall community, we continue to strengthen KHTP’s ecosystem with strategic projects,” says Tuan Haji Mohd Sahil Zabidi, the group CEO of KTPC. These projects include the development of solar energy generation capacity, a private hospital and centralised labour quarters.

Mr Tuan says that the park continues to strengthen its R&D institutions, such as the publicly-owned Standard and Industrial Research Institute of Malaysia, to further its appeal for multinationals. Currently, 248 acres of the park’s land area is dedicated to R&D and training, with a further 2144 acres assigned to industrial uses.

The park will expand to another 696 acres of industrial land, with the infrastructure expected to be ready by the second quarter of 2023.

This article first appeared in the October/November print edition of fDi Intelligence. View a digital edition of the magazine here.