KUALA LUMPUR: Europe's leading chipmaker Infineon has kicked off production at its largest-ever power chip plant in Malaysia and will invest an additional RM30.1 billion (€5 billion) for Phase 2 of the facility.
This is on top of the original €2 billion for Phase 1 of the plant in Kulim, Kedah as Infineon seeks to build the world's largest 200-millimetre (mm) silicon carbide (SiC) power fabrication plant.
Infineon's investments mark a win for Malaysia as it attempts to move up the global semiconductor supply chain.
The Kulim plant will be the world's biggest factory for SiC once it reaches full capacity over next five years, Infineon said.
It is eyeing demand from the renewable energy sector and electrified applications such as electric vehicles and AI data centres.
Infineon chief executive officer Jochen Hanebeck said production was able to begin "several months" ahead of schedule thanks in part to the new plant's virtual connection to the company's key development and production centre in Villach, Austria.
The Kulim plant's Phase 1 and Phase 2 are expected to generate 900 and 600 high value jobs in Malaysia respectively. In total, 4,000 jobs will be created.
Infineon has about 15,000 employees in Malaysia, more than anywhere else in the world, including its home of Germany.
Prime Minister Datuk Seri Anwar Ibrahim, who attended the opening, said Infineon's project reflected Malaysia's capability in attracting world-class investments.
In extending the government's appreciation to Infineon for having confidence in the country, Anwar said the investment would be a major selling point for Malaysia to lure more high-value investments.
Malaysia also had emerged as the top investment destination for Germany's electric and electronic (E&E) industry players.
"I would say look, Infineon has decided (to invest in Malaysia) surely for good reasons (either) for the infrastructure, for attractive incentives, or professional and workforce discipline.
"Because of your presence to invest in the world's largest 200mm silicon carbide power fab, that alone is a major selling point for us in the country, so thank you very much. Malaysia is now is considered as a hub for semiconductor industry. Again, this is a remarkable feat, thanks to all the players for playing their part," he added.
Anwar also said Malaysia's firm stance on the Palestine-Israeli conflict will not negatively affect the growth of the domestic E&E industry.
The country's E&E exports to the United States accounted for 26 per cent of its total, a significant share of the total industry exports, he added.
Meanwhile, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the investment highlights Malaysia's growing credibility as a regional hub for cutting-edge technology and innovation in the semiconductor space.
Tengku Zafrul said Infineon's additional RM30.1 billion investment will not only drive innovation and Malaysia's industrial reform agenda, but also create 1,500 high-skilled job opportunities for Malaysians.
Malaysian Investment Development Authority chief executive officer Sikh Shamsul Ibrahim Sikh Abdul Majid said Infineon's expansion significantly strengthens Malaysia's position in the global semiconductor supply chain.
"By attracting foreign investments in green technology, we are enhancing our green investment ecosystem as well as the local supply chain.
Malaysia, which has one of the most diverse semiconductor sectors in Asia Pacific, has seen impressive growth.
In the first quarter of 2024 alone, the industry attracted RM34.3 billion in approved investments from 34 projects, creating 6,221 new jobs.
This development aligns with the National Semiconductor Strategy, which has set a bold target to attract at least RM500 billion in investment for the semiconductor industry, in the first phase of the plan.