Intel Corp is to spend US$7.1 billion building a new chip packaging facility in Malaysia, a major Asian investment intended to address an endemic global semiconductor shortage at a time when Washington is advocating domestic production.
The US chipmaker intends to invest 30 billion ringgit (US$7.1 billion) shoring up its advanced chip packaging capabilities in Penang state, Malaysia’s main investment promotion agency said in a statement on Monday.
The company plans to elaborate on its plans for the Asian nation at a news conference tomorrow in conjunction with Malaysian Minister of International Trade and Industry Azmin Ali and Malaysian Investment Development Authority chief executive Arham Abdul Rahman, the statement said.
The news conference is to coincide with US Secretary of State Antony Blinken’s first visit to Southeast Asia.
Intel chief executive Pat Gelsinger took the helm of the largest US chipmaker in February with a mandate to take back leadership of the industry from Asian giants such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
Investors want Gelsinger to staunch market share losses and customer defections stemming in part from stumbles in upgrading technology.
At the same time, years of global industry underinvestment and a surge in demand for computing devices during COVID-19 pandemic lockdowns have created an unprecedented shortage of the semiconductors needed in everything from automobiles to smartphones.
Gelsinger is in Taiwan and Malaysia this week for talks that underscore how Asian manufacturing would be crucial to his turnaround efforts. His trip is to include a meeting with TSMC, people familiar with his plans said.
Intel needs TSMC’s advanced manufacturing services, but it also plans to compete with the Taiwanese company in the foundry business, a tricky balancing act for Gelsinger.
Apart from Malaysia, Intel also operates a plant in Dalian, China.
It is Gelsinger’s first trip to Asia since taking the top job at Intel and comes as he lobbies the US government to allocate money to boost the supply of chips only to domestic companies.
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