Penang picked for Simmtech’s US$120 million investment

By Audrey Dermawan – July 30, 2021 @ 12:23pm18

A version of this article was first published on the nst.com

GEORGE TOWN: South Korea’s Simmtech Holdings Inc, one of the global leading players in printed circuit board (PCB) and packaging substrate for the semiconductor industry, has chosen Penang for its first large scale factory in Southeast Asia.

Via its Malaysian subsidiary, Sustio Sdn Bhd (Sustio), Simmtech will invest US$120 million (about RM508 million) under the first phase, with further investment be dependent on the market situation.

The investment is for the construction of a 7.2ha site facility in Batu Kawan, which began in May, as well as equipments.ADVERTISING

The operation is expected to commence in the first quarter of 2022. MORE NEWS

The new facility in Penang is expected to create 1,200 high value jobs in engineering, manufacturing and quality management.

Simmtech Southeast Asia managing director Jeffery Chun said Penang was chosen owing to its well established electronic ecosystem as well as customer-base given the industry’s dynamic growth.

“Despite the ongoing Covid-19 pandemic, the project is still moving and we do not foresee any major delays.

“Instead, we see this pandemic as an opportunity for the industry…this is a great period for the semiconductor industry as a whole,” he said at the investment announcement along with Chief Minister Chow Kon Yeow via a virtual session this morning.

Chun said the company recognised that this was a challenging period, and was closely monitoring the government announcements and guidelines.

“We will ensuring we follow all protocols, guidelines and standard operating procedures (SOP) in place,” he added.

Elaborating, Chun said the state-of-the-art facility iwould further strengthen Simmtech’s dominant market position and to meet the heighten demand from DDR5 DRAM (Double Data Rate 5 Dynamic Random-Access Memory) as well as data storage devices and packaging substrate products.

“Notably, our presence in Penang will be an added advantage for Simmtech in terms of the close proximity to our major customers in this region, thereby enabling greater value creation. 

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

Meanwhile, Chow said he was excited to welcome Simmtech, the first major Korean investor from the semiconductor industry, in Penang. 

“I am hopeful that Simmtech’s arrival is the beginning of a new chapter with Korea, one of the prominent countries in the global technology sphere.

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

“I am pleased that Penang’s well-developed ecosystem is recognised by leaders across the semiconductor value chain,” he said, adding that in addition to Simmtech, Penang has witnessed a number of global heavyweights announcing new investments as well as expansions of existing facilities in the state over the past two years. 

Simmtech’s Sustio project, Chow noted, would bring Penang’s industry to greater heights and further integrate Penang into the global semiconductor supply chain.

According to Chow, driven by Penang’s position as the country’s leading electronics and electrical (E&E) hub, the state continues to be a key pillar of Malaysia’s external trade. 

In 2020, Penang recorded a commendable RM310 billion of exports and RM110 billion of trade surplus, contributed 32 per cent and 60 per cent of the country’s said total, respectively. 

Notably, Penang’s E&E exports were valued at RM231 billion in 2020, which formed 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 manufacturing investment for the said period,.

Of this, 47 per cent was contributed by E&E products, representing 35 per cent of the country’s total in E&E, further entrenching the state’s position as the Silicon Island of the East.

“Penang will stay committed to providing continuous support and facilitation to ensure smooth project implementation on the ground,” he added.

Since its establishment in 1987, Simmtech has been focusing on developing and manufacturing high-layer PCB (printed circuit board) for semiconductors. 

The major products by Simmtech include module PCB for semiconductors’ memory expansion and substrates for semiconductor chip assembly.