MKS Instruments will build a factory in Malaysia

Recently, American semiconductor equipment manufacturer MKS Instruments announced plans to build a factory in Penang, Malaysia to support the production of wafer manufacturing equipment in the region and globally. This development plan will be divided into three stages to build a new factory, and it is expected to break ground and start construction in early 2025.

Why choose to build a factory in Malaysia?
In recent years, many Southeast Asian countries have become the preferred hub for semiconductor manufacturers to expand production due to their low labor costs and imperfect market competition, especially Malaysia.

A sound electrical and electronic manufacturing ecosystem, good connectivity, reliable infrastructure, and skilled multilingual labor are the core advantages for Penang, Malaysia to win investment in the new chip industry from multinational corporations.

At present, Penang, Malaysia has attracted multiple companies including Pan Forest Group, Infineon Technologies, Texas Instruments, Micron Technologies, Bosch, Advanced Semiconductor Engineering (ASE), and Intel to invest and establish factories.

It is worth mentioning that Intel is currently building its latest packaging plant in Penang, Malaysia, and will produce the most advanced 3D IC packaging Foveros in the future, which is expected to be launched in 2024 or 2025.

After investigation, it was found that Intel alone has six testing facilities (including unfinished facilities) in Malaysia.
In fact, Malaysian Prime Minister Anwar Ibrahim announced in late May that he would allocate at least RM25 billion to implement the national semiconductor development strategy, and hoped to strive for an investment target of at least RM500 billion in the first phase of establishing the foundation.

Nowadays, driven by strong demand for applications such as AI and cloud servers, advanced packaging is bound to accelerate growth. The urgent shortage of production capacity will also encourage major manufacturers to actively increase investment, expand production capacity, and enhance the resilience of the supply chain.

Regarding the construction of the factory in Malaysia, John T.C. Lee, CEO of MKS, also stated that our planned factory has a unique geographical location, adjacent to customers and suppliers, and will fully benefit from the strong semiconductor ecosystem in the local area. This business expansion in Malaysia is an important milestone for MKS, marking our continuous consolidation of our leading position in a wide range of semiconductor manufacturing applications.
Looking at the recent performance of MKS, it achieved a full year revenue of 3.622 billion US dollars in 2023, a year-on-year increase of 2%, and a net income of 1.841 billion US dollars in GAAP, a year-on-year increase of 452.85%; In the first quarter of 2024, it achieved a net income of 868 million US dollars, a year-on-year increase of 9.3%. For the second quarter of 2024, MKS expects revenue to be $860 million, plus or minus $40 million.

Source: OFweek