Penang Climbs Up the Semiconductor Value Chain

ACCORDING TO THE Financial Times, Malaysia (mostly Penang) supplies 20% of the semiconductor products imported by the US as of February 2023. While Penang is often touted as the Silicon Valley of the East, some question whether this moniker still holds, especially with Taiwan’s dominance in the semiconductor industry. To understand these nuances, I spoke with Wong Siew Hai, president of the Malaysia Semiconductor Industry Association (MSIA), who came out of retirement during the pandemic to strengthen the industry’s voice, and with other industry leaders.

Before American semiconductor giant, Intel, built its first overseas production facility in 1972, Bayan Lepas was mostly paddy fields. “Back then, we were the first [in the East]... so you could call it that,” recalls Wong, a former Vice President of Intel. “It is different today... China is now a major player; so are many others [like Taiwan, Japan and South Korea].” He sees the “Silicon Valley” label more as a marketing tool. Wong reckons, given the globally distributed yet interdependent nature of manufacturing, it is more helpful to see the ecosystem to be consisting of various Silicon Valleys, each with its distinct areas of excellence, each adding value to the semiconductor value chain.