Intel seeks to expand chip production capacity plans to invest $7.1 billion in new plant in Malaysia

Chipmaker Intel (Intel) plans to invest 30 billion ringgit ($7.1 billion) to build a state-of-the-art semiconductor production facility in Malaysia to expand its production capacity, according to Malaysian government agencies on Monday. At the same time, the US government is actively promoting the world's major semiconductor companies to set up factories in the United States to keep the chip supply chain in the United States.

The Malaysian Investment and Development Authority said in a media invitation that the move would enhance the packaging capacity of Intel's advanced process semiconductors and confirmed the company's commitment to increase production capacity in Malaysia.

According to the Investment and Development Authority, a press conference on the investment will be held on Wednesday, which will be attended by Intel CEO Patrick Kissinger (Patrick Paul Gelsinger), Malaysian Trade Minister Azmin Ali (Azmin Ali) and Aham Abdul Rahman (Arham Abdul Rahman), chief executive of the Malaysian Investment and Development Authority.

This is Kissinger's first visit to Asia since becoming Intel's chief executive, while he is lobbying the US government to leave subsidies and other incentives to US chipmakers. He said overseas semiconductor manufacturers such as TSMC and Samsung Electronics should not receive financial support through the Chip Act.

Intel relies on Malaysia for some of its chip packaging business, which is the last crucial step in semiconductor manufacturing. During the production disruption caused by novel coronavirus, demand for chips in almost everything from cars to smartphones surged, creating supply chain problems for many industries that rely on semiconductors. this has forced Intel and other manufacturers to respond to market demand.

In September, Intel broke ground on two chip plants in Arizona, which the company said had invested $20 billion. Kissinger said in a speech earlier this month that Intel is committed to becoming a "semiconductor manufacturing" company. It is the only large company in the United States that has both the ability to design and manufacture chips.

Intel needs TSMC's advanced manufacturing services and plans to compete with TSMC in the so-called contract manufacturing business, which is a thorny balance for Intel's chief executive. In addition to Malaysia, Intel also has a factory in Dalian, China.

Samsung Electronics announced in November that it would invest $17 billion to build a new chip plant in Texas, as part of the US government's efforts to push for more semiconductor production onshore. Meanwhile, TSMC said in June that it had begun building a $12 billion chip plant in Arizona.