Chipmakers searching for 'China Plus 1' are finding Malaysia

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Construction cranes surround a new plant in Malaysia’s industrial park in Kulim. Austrian tech giant AT&S plans to produce at full capacity by year’s end. European and American companies are moving to or expanding operations in Malaysia’s electrical and electronics manufacturing sector. U.S. chip giant Intel and German corporation Infineon are investing $7 billion each. Nvidia is teaming up with the country’s utilities conglomerate to develop a $4.3 billion artificial intelligence cloud and supercomputer center. Texas Instruments, Ericsson, Bosch and Lam Research are also expanding in Malaysia. The geopolitical friction and competition between the United States and China are driving these investment decisions. AT&S decided to diversify its footprint after years of investment in China. Malaysia’s strategic position in the South China Sea and economic ties to China and the United States make it an attractive location for companies looking to strengthen their supply chains and production capabilities. Malaysia has a head start in the tech industry, with a long history of attracting electrical and electronic superstars. The country offers tax incentives and a well-developed ecosystem to semiconductor firms. As concerns about global supply chains grew, Malaysia became a preferred investment destination. The country is already the world’s sixth largest exporter of semiconductors. With a strong infrastructure and network of tech companies, Malaysia is poised to become a hot spot in the global electronics industry.