PENANG received a big boost when Lam Research Corporation, a global supplier of wafer fabrication equipment and services to the semiconductor industry, has pledged to invest about RM1 billion in its new factory at the Batu Kawan Industrial Park.

Chief Minister Chow Kon Yeow, who announced the company’s expansion plans in Penang this year, said the state was proud that Lam Research would be investing on a new 34-acre site with 700,000sq ft of office, manufacturing facilities and warehouse.

“This strategic investment is a significant boost to Penang’s electrical and electronics (E&E) ecosystem. It is elevating Penang’s status in the world map of the semiconductor industry,” Chow told a video conference in Komtar today.

“Lam Research’s investment is expected to have far-reaching impacts, especially on supply chain localisation opportunities, uplifting the skillset of technical workforce and local SMEs as well as high economic spill-over and multiplier effects.

“Its footprint in Penang will attract more relevant vendors to invest here and will enable the state to create a more robust E&E ecosystem than ever.”

The video conference was attended by Lam Research senior vice-president (Global Operations) Kevin Jennings and vice-president (manufacturing) Mike Snell from the United States.

Also present at the video conference in Komtar were Deputy Chief Minister I Datuk Ahmad Zakiyuddin Abdul Rahman, investPenang chief executive officer Datuk Loo Lee Lian, Penang Development Corporation general manager Datuk Mohd Bazid Abd Kahar, Malaysian Investment Development Authority (MIDA) Penang director Yusni Md Yusof.

Chow added that with Lam Research’s presence, an estimated 350 high value jobs would be created over the next three years.

Chow continued: “Investment from Lam Research is significant to Penang and Malaysia as this is the first investment among the top wafer fabrication equipment players to set up a manufacturing facility in the country.

“Its presence is expected to further boost Malaysia’s image as a preferred location for the semiconductor industry, equipment and the electrical and electronics industry. Penang is already a regional hub for backend high technology machinery and equipment as well as the world’s leading location for semiconductor and testing.”

Chow said the wafer fabrication equipment market was estimated to have generated US$50 billion (RM206 billion) of sales in 2019 or equivalent to 87% of global total semiconductor equipment sales of US$58 billion (RM239 billion) in 2019.

In addition, he said Penang undoubtedly is the key pillar to Malaysia’s external trade. Penang recorded a trade surplus of US$24 billion (RM99 billion) in Jan-Nov 2019, representing 77% of Malaysia’s total trade surplus for the period.

Jennings, who was speaking from Oregon and apologised for not being able to be present in person, said construction of the new facility in Batu Kawan would begin next month with the first shipment operations sometime in 2021.

He said Lam Research is a 40-year-old company, founded in January 1980 with its headquarters now in Fremont, California.

“Since then, we’ve played a key role, contributing to the extraordinary pace of innovation in the semiconductor industry.

“We’re a leader in semiconductor equipment. Our products are used to make essentially nearly every device in the world, from cell phones to laptops to digital cameras,” Jennings said.

“We’re very excited to join the network of Penang’s outstanding electronics and electrical ecosystem. It is this network that attracted us to the location, and we appreciate the support of the Malaysian government, Malaysian Investment Development Authority (MIDA), Ministry of International Trade and Industry (MITI), Penang Development Corporation (PDC) and investPenang.

“This new site will add to our existing global production locations in the United States, South Korea, Taiwan and Austria.

“Initially, the factory will be 700,000sq ft. However, we have the opportunity for future growth.

“Our mission is to enable our customers’ success and solve grand challenges in the semiconductor industry. We look forward to a strong partnership in the community and Malaysia. We are excited to embark on this journey.”

Snell, in response to a reporter’s question, revealed that Lam Research would invest US$150 million (RM619 million) for the factory setup and US$75 million (RM309 million) for the warehouse in the initial phase.

In concluding the video conference, Chow expressed the state government’s appreciation to the Federal Government, particularly the Ministry of Finance (MOF), MITI, MIDA and the National Committee on Investment (NCI) for the approval and support in attracting the investment.

He also applauded investPenang and PDC for their hard work in facilitating the investment.

Chow also congratulated Lam Research on their significant investment in Penang and Malaysia; wishing them continuous growth and success and expressing his welcome to Jennings and Snell when they are able to travel to Penang.