Cover Story: Chinese Chipmakers Look to Malaysia to Sidestep U.S. Tariffs (AI Translation)
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文｜财新周刊 王端、杨敏 发自马来西亚槟城、柔佛 ，覃敏 发自北京
By Wang Duan and Yang Min from Caixin Weekly, reporting from Penang and Johor, Malaysia, and Qin Min from Beijing
在马来西亚西北部联邦州槟城的机场附近，空气中弥漫着浓重的汽油味，一辆辆DHL大货车将半导体产品源源不断地运往机场。
Near the airport in Penang, a federal state in northwestern Malaysia, the air is thick with the smell of gasoline as DHL trucks steadily transport semiconductor products to the airport.
槟城地处热带，四季皆享椰林绿野、碧海蓝天的自然美景。这个面积不过1000平方公里的地方，总人口约177万，其中马来裔占45.1%，华裔占44.2%，是马来西亚各州拥有最多集成电路（IC）设计及研发公司的地区，有“东方硅谷”之称。
Located in the tropics, Penang enjoys the natural beauty of coconut palms, lush greenery, and azure seas throughout the year. Covering an area of just about 1,000 square kilometers, it has a total population of approximately 1.77 million, of which 45.1% are Malays and 44.2% are Chinese. Penang is renowned as the region in Malaysia with the highest concentration of integrated circuit (IC) design and research and development companies, earning it the nickname "Silicon Valley of the East."
槟城半导体封测产业始自上世纪70年代初，略早于韩国和中国台湾。槟城国际机场附近的峇六拜（Bayan Lepas，印尼语意为“飞翔的鹦鹉”）自由贸易工业区，是马来西亚为吸引外资尤其电子和半导体产业而设立的第一个自由贸易工业区。槟城国际机场在上世纪70年代的扩建，很大程度上也是为了支持产业发展。
The semiconductor packaging and testing industry in Penang began in the early 1970s, slightly earlier than in South Korea and Taiwan. The Bayan Lepas Free Industrial Zone, located near Penang International Airport, was Malaysia's first free trade industrial area established to attract foreign investment, particularly in electronics and semiconductors. The expansion of Penang International Airport in the 1970s was largely to support the development of these industries.
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- Penang, Malaysia, known as the "Silicon Valley of the East," has a significant concentration of semiconductor companies, attracting over 350 foreign enterprises, including major players like Intel, TF-AMD, and Infineon.
- Malaysia ranks as the world's sixth-largest semiconductor exporter and aims to increase its industry value chain through strategic policies and investments, including the National Semiconductor Strategy, with a goal of attracting 500 billion ringgit in investments.
- Southeast Asia is increasingly viewed as a strategic hub for semiconductor manufacturing amid geopolitical tensions, with China and Western companies expanding operations there to ensure supply chain resilience.
The article explores Penang, Malaysia, which has developed into a major hub for the semiconductor industry, earning the nickname "Silicon Valley of the East." Situated in the tropics, Penang offers natural beauty and has a population of approximately 1.77 million. Its prominence in the semiconductor sector traces back to the establishment of the Bayan Lepas Free Industrial Zone in the 1970s, aimed at attracting foreign investments, particularly in electronics and semiconductors. With numerous global companies, including Intel, AMD, and Bosch, Penang remains a key player in the global semiconductor supply chain. [para. 1][para. 3]
InvestPenang, the local government investment bureau, is leading initiatives like the "Silicon Design@5km+ Program" to enhance the growth of IC design and technology hubs. Malaysia, already the world’s sixth-largest semiconductor exporter, has seen substantial investment inflows in recent years, indicative of its strategic efforts to capitalize on the burgeoning demand for semiconductor products. The government, under Prime Minister Anwar Ibrahim, is prioritizing this sector's growth as a linchpin of its economic strategy, emphasizing increased fiscal support and international collaborations. [para. 3][para. 10][para. 12]
Malaysia's semiconductor industry faces the geopolitical impacts of the U.S.-China technology tensions. While Malaysia historically lagged in value-added manufacturing, focusing on backend processes like packaging and testing, it now seeks to leverage current global industrial shifts to advance further up the semiconductor supply chain. With favorable conditions and strategic planning, Penang and nearby areas could become central engines for Malaysia’s economic growth. [para. 15][para. 18][para. 20]
China's semiconductor industry is progressively looking towards Southeast Asia as a strategic region amid increasing U.S. restrictions. Many Chinese companies are expanding operations in countries like Malaysia and Vietnam, driven by trade barriers, competitive domestic markets, and the need for international expansion. Despite geopolitical challenges, the region's diversification presents a strategic opportunity for reshaping global supply chains. [para. 22][para. 25][para. 29]
The Malaysian government, particularly in Penang, is actively working to attract more direct foreign investment and partnerships by presenting itself as a strategic geographical player. This aligns with Malaysia’s vision to emerge as a semiconductor powerhouse with upgraded industrial capacity and skilled labor forces. High-profile projects illustrate Malaysia's ambition, such as Intel's investment in advanced packaging technology and Infineon's massive chip factory construction. [para. 30][para. 33][para. 37]
While Penang's historical industrial base offers advantages, newer regions in Malaysia, like Selangor and Johor, also incentives to foster semiconductor industry growth. Selangor focuses on integrated circuit design with facilities providing rent-free office space, aiming to entice global players. With prospects developing in Malaysia, around the world companies are assessing the region’s potential for "China+1" strategies, emphasizing partnerships and collaborative growth in diversified industries. [para. 40][para. 43][para. 47]
Malaysia is thus widening its economic strategies, seeking to balance traditional industrial strengths with innovation-led growth, aligning with regional and global market trends. Prominent local companies like Inari Amertron and new ventures like Skyechip herald the emergence of a robust domestic semiconductor scene, supported by government and market forces aiming for higher value production and integration within global supply chains. [para. 50][para. 53][para. 56]
Overall, Penang and Malaysia's broader semiconductor ambitions exemplify the balancing act between leveraging historical strengths in manufacturing while advancing into higher-value sectors amidst a shifting global economic and political landscape. [para. 60][para. 63][para. 67]
- TF-AMD
通富超威 - TF-AMD is a joint venture between Chinese semiconductor packaging company Tongfu Microelectronics (TFME) and American microprocessor company AMD. Established after TFME acquired majority stakes in AMD's factories in Suzhou, China, and Penang, Malaysia, TF-AMD is part of the global semiconductor supply chain, focusing on CPU and GPU packaging and testing. Located in Penang, it plays a significant role in Malaysia's semiconductor industry, contributing to the region's economic development.
- Kyocera
京瓷 - Kyocera is a Japanese electronics component developer and manufacturer located in the free trade industrial zone of Bayan Lepas, near the Penang International Airport in Malaysia. The factory is organized with numbered chimneys and is situated opposite American hard drive manufacturer Western Digital. Kyocera is part of the industrial landscape featuring prominent international companies such as Intel and Micron, contributing to Penang's reputation as a hub for semiconductor and electronics industries.
- Western Digital
西部数据 - Western Digital, a major hard drive manufacturer, has a presence in the Batu Maung Free Industrial Zone near Penang International Airport. There, Western Digital's facilities are part of a dense cluster of international tech companies, alongside firms like Intel, Micron, and Kyocera, contributing to Penang's reputation as a hub for the semiconductor and electronics industry.
- Intel
英特尔 - Intel was the first company to set up a facility outside the U.S. in Penang, Malaysia, in 1972, starting operations amid challenging circumstances. Today, Intel has over 10,000 employees in Penang and is expanding its facility to focus on advanced 3D IC packaging technologies. The company has a significant historical and developmental influence in Penang's semiconductor industry, often referred to as the "Huangpu Military Academy" for nurturing local talent.
- Micron
美光 - The article mentions that Micron is one of the semiconductor manufacturing plants located in northern Johor, Malaysia. Micron is part of the larger semiconductor presence in Malaysia, indicating its involvement in the regional semiconductor industry and economy.
- Infineon
英飞凌 - Infineon, a German semiconductor giant, is investing 70 billion euros to build a wafer factory in Kulim, Kedah, Malaysia. The first phase of the project, focused on silicon carbide power semiconductor wafers including gallium nitride epitaxy, began in August 2023 with a 20 billion euro investment. The new facility aims to improve efficiency in electric vehicles, fast charging stations, trains, renewable energy systems, and AI data centers.
- Bosch
博世 - Bosch, a German company, is one of the established electronic industry leaders in Penang, Malaysia, having set up operations alongside other major international firms. Often referred to as one of the "Eight Samurai," Bosch has helped to lay the industrial foundation in Penang, attracting other multinational corporations to the area and contributing to the evolution of the local semiconductor industry.
- Renesas
瑞萨 - Renesas, a German or Japanese company, is mentioned in the article as one of the key semiconductor enterprises based in Penang, Malaysia. It is noted for having a presence in the region, alongside other major international companies such as Intel, Micron, and Infineon, contributing to Penang's status as a hub for semiconductor and electronics industries.
- TFME
通富微电 - TFME (Tongfu Microelectronics) is a leading Chinese semiconductor company engaged in chip packaging and testing. It formed a joint venture with AMD, acquiring AMD's factories in Suzhou, China, and Penang, Malaysia, to boost its international competitiveness and expand its market presence. In Penang, TFME has expanded its operations significantly, contributing to Malaysia's semiconductor industry while integrating into the global advanced semiconductor supply chain.
- ASE
日月光 - The article does not mention ASE (Advanced Semiconductor Engineering) explicitly, so there is no direct information provided about it. Please let me know if you would like additional information or details on a specific topic related to ASE.
- Inari
益纳利美昌 - Inari is a Malaysian chip packaging and electronic manufacturing company founded in 2006. It operates 11 factories in Malaysia, the Philippines, and China. Inari's main customers include Broadcom and Osram, and it is one of the local semiconductor companies supported by the Malaysian government. The company is focused on enhancing its value chain, but transitioning to a product owner requires significant R&D investment, which poses challenges.
- ViTrox
伟特机构 - ViTrox is a Malaysian company located in Penang, mentioned in the article as part of the local semiconductor industry cluster. The article highlights Penang's significant role in Malaysia's semiconductor sector, known as the "Silicon Valley of the East." ViTrox is among local companies contributing to Penang's development as a technology hub, alongside international tech giants and other domestic firms.
- Azoteq
欧森斯传感 - The article does not provide any information about Azoteq. It focuses on the semiconductor industry in Malaysia, particularly in Penang, and discusses various companies and geopolitical factors impacting the industry's growth and international relations.
- Early 1970s：
- The semiconductor packaging and testing industry began in Penang, Malaysia, slightly earlier than in South Korea and Taiwan.
- 1970s：
- The Bayan Lepas Free Industrial Zone was established in Penang, near Penang International Airport.
- 2022：
- Anwar, born in Penang, became the Prime Minister of Malaysia, focusing on economic development with ambitious plans for the semiconductor industry.
- 2023：
- China's semiconductor sales have grown to $150 billion, accounting for nearly 30% of the global market.
- By 2024：
- Over 350 foreign enterprises have established factories in Penang, with more than 50 being Chinese companies.
- May 2024：
- Malaysia unveiled the National Semiconductor Strategy (NSS), allocating more than 25 billion ringgit in fiscal support to the semiconductor industry.
- By Late October 2024：
- Chinese semiconductor companies were informed by TSMC that AI chips with 7-nanometer or below processes would soon be unproducible at TSMC.
- November 4-7, 2024：
- Anwar made his third visit to China as Malaysia's Prime Minister, engaging with Chinese semiconductor firms.
- November 5, 2024：
- International Semiconductor Executive Summit (I.S.E.S) was held in Penang.
- November 8, 2024：
- HanSingTek's General Manager spoke at the China Chip Companies Going Global Forum in Zhuhai.
- November 13, 2024：
- Nvidia CEO Jensen Huang emphasized the importance of strengthening and diversifying production bases at a press conference in Tokyo.
- November 18, 2024：
- HSBC's CEO spoke about opportunities in the 'China+1' strategy at the Hong Kong International Financial Leaders' Investment Summit.
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