Posted Sep 17, 2021, 2:01 AM
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Tech: RM508 mil investment in Penang by South Korea’s Simmtech to give local equipment players a boost
Liew Jia Teng The Edge Malaysia September 08, 2021 16:00 pm +08
Quote:
SOUTH Korea-based semiconductor company Simmtech Holdings Co Ltd’s decision to make a greenfield investment in Penang bodes well for Malaysian equipment vendors and automation houses.
On July 30, Simmtech — one of the world’s largest players in printed circuit board (PCB) and packaging substrate for the semiconductor industry — announced that it had chosen an 18-acre site at Batu Kawan Industrial Park for its first large-scale factory in Southeast Asia.
According to its managing director for Southeast Asia, Jeffery Chun, the group intends to localise its supply chain by buying local equipment and using locally sourced materials.
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“The construction of our Penang plant just started a couple of months ago, so we have yet to establish a local supply chain here. But looking at our past experiences in China and Japan, it is in our interest to work with local partners and develop a local supply chain for better operational efficiency. We can’t wait to find out more about which local suppliers and what equipment are available in Malaysia,” he tells The Edge in an exclusive interview.
“There will be a lot of automation in our manufacturing lines. Penang is especially well developed in the area of automation. The state has quite a number of competitive local equipment suppliers specialising in automation. We are looking forward to engaging these local suppliers and adding value to our processes with more efficient equipment and automation solutions,” he says.
Phase 1 of the project will cost US$120 million (RM508 million), including land acquisition, construction of a factory and the purchase of equipment, with operation slated to commence by the first half of next year. The new facility is expected to create 1,200 high-value jobs in engineering, manufacturing and quality management by the first half of 2023.
Chun says Simmtech is well aligned with the Malaysian government’s push for automation in the manufacturing industry.
“Looking at our customers in Penang, I am sure there are valid reasons why they are expanding in Malaysia. Like them, we also are confident of growing together with our local partners. For the equipment vendor’s portion, we have more than 50% localisation in China and Japan. We expect the same in Penang,” he adds.
Chun acknowledges that Simmtech needs to source only specialty and patented equipment from overseas suppliers. Other than that, the group hopes to localise them as much as it can.
“To us, the higher the localisation, the better. Penang is well known for having semiconductor equipment manufacturers, which are also expanding their operations in Batu Kawan. I am sure there will be more resources available to us in the future.
“I can’t give you the exact figure, but I would say a significant amount of our planned investments has been allocated for buying equipment,” he says.
Apart from equipment, Simmtech is looking to source direct and indirect materials such as chemicals locally.
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https://www.theedgemarkets.com/artic...-players-boost
Simmtech’s new facility in Penang is expected to create 1,200 high-value jobs in engineering, manufacturing and quality management by the first half of 2023 (Photo by Simmtech)
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