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Malaysia to start making smallest chips in the world

Malaysia said yesterday it would begin commercial production of the world's smallest microchip by the end of the year, with interest already coming from countries including China and the US.

The government last September bought the rights from Japan's FEC Inc to the revolutionary chip so small it can be embedded in everything from money to human bodies to prevent banknote and document forgery, or for keeping track of goods and people.

The project was mooted by former premier Mahathir Mohamad last year, as part of his efforts to push Malaysia into high-tech industries and make the country an industrialized nation by 2020.

FEC (M) Sdn Bhd chief executive Kunioki Ichioka told a news conference the company was testing the chip and would submit proposals to the government on applications. The chip, developed by a Japanese firm, has been dubbed "MM," or Malaysian Microchip.

Canada and Australia have expressed interest in exploring the use the chip in their national identity cards and Mexico for its election card, while China, Taiwan and the US are also keen on the product, he said.

The chips cost about US$0.10 each but "we are aiming to reduce the price," he said.

Officials said the chip would initially be manufactured in Japan before production is shifted to a factory in Malaysia's northern Kedah state belonging to state-owned wafer fabrication firm Silterra (M) Sdn Bhd.

Details are still being worked out but FEC executive director Gophal Ramdas said production could run into "billions of chips," with local passport chipmaker Iris Technology already expressing interest in ordering 100 million MM chips.

China had also expressed interest in investing in the development of applications and this was a great boost because "it is a big market for us," he added.
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