KUALA LUMPUR: Zodiac (China) Applied Science and Technology Research Centre Ltd is looking at an initial investment of RM1.5 billion as part of a larger plan to set up a manufacturing base for developing 5G chips and encapsulation technology in Malaysia.
Zodiac is looking to build its second production facility on a 500-acre parcel in Malaysia.
The group is a high-technology enterprise with high-frequency integrated circuit (IC) design competencies, packaging and testing capabilities, and satellite receiving system design and production technology.
Its first facility which is located in Quanzhou, Fujian, China has been operational since 2018.
Zodiac group chairman Datuk Chu Boon Tiong claimed that its satellite chips were globally one of the largest selling, and had always been at the forefront of the industry in terms of technology.
"In response to the current international situation and market needs, the group has decided to set up its second manufacturing base in Malaysia for developing 5G chips and encapsulation," Chu said in a statement today.
In short, Zodiac's new corporate's strategic layout and restructuring plan or new development strategy stems from the need to mitigate risks brought about by the escalating China-US tension and the Covid-19 outbreak globally.
"The first phase of the production facility will be built on a plot of land, measuring 500 acres, with an initial investment of RM1.5 billion," he reiterated.
The endorsement of Malaysia as an investment destination hinges on the promising environment, well-developed infrastructure and sound financial system, coupled with its strategic location, which should help Zodiac establish an excellent global industrial chain connection.
Zodiac has also managed to lock in the support of the local government of the location of where the investment will be made, which promotes exports of finished products and offers preferential treatment status.
Premised on the above catalysts, the group expects its future production capacity to exceed a whopping US$20 billion.
"The decision to invest in Malaysia was come to after taking into consideration the regional demand for Zodiac's products in the near future, and understanding how the group's competitiveness will be enhanced in the international market with the investment," it said.
"This investment is also expected to see vast improvements in areas of cost control, production costs and overall efficiency," it added.
Zodiac has made a breakthrough in the 5G limitation for fifth-generation mobile communication, and it has moved towards the development of the sixth-generation technology.
Towards this end, the group said it would invest about US$600 million in the near future to develop its sixth-generation communication system, which will be the catalyst for the second stage of 6G research and investment, sowing new seeds for its future.
Zodiac said it had received both financial and technical support from Hong Kong Blue Mountain Group and Hong Kong Headway Technology Holdings Co Ltd for the development of 6G technology.
"The group's current high-end chip manufacturing technology and fifth-generation encapsulation for technology have been breaking through the limitations of 5G, and shifted towards 6G development,' Chu said.
On recent media reports stating that many Taiwanese businesses had intended to shift their investment away from China to Southeast Asia, Zodiac highlighted that China was a developing country with a population of 1.4 billion, and thus had huge development potential.
"In a nutshell, the group has always valued and placed great importance on the developments in the Chinese. As part of future plans and strategy, the group is considering setting up its headquarters in one of China's major cities," it noted.