Malaysia and China are pursuing closer cooperation on semiconductors via a joint industry event, as Kuala Lumpur seeks to advance its chip industry while Beijing bolsters its own supply chains.
The first Asia-Pacific Semiconductor Summit and Expo is set for October in the Malaysian state of Penang. The Malaysia Semiconductor Industry Association will host the event with the China Electronic Production Equipment Industry Association.
Malaysian businesses are anticipated to make up around 40% of the exhibiting companies, with 30% from China and 30% from elsewhere in the region.
The event is expected to attract businesses involved in chip design, manufacturing, materials and testing, as well as research organizations and investment funds. ACM Research, a Chinese company specializing in wafer cleaning equipment, is considering participating.
Malaysian Prime Minister Anwar Ibrahim and Chinese Premier Li Qiang in June reached an agreement to strengthen the relationship between the two countries, which are marking the 50th anniversary of diplomatic ties. This effort is believed to have led to planning the joint chip event.
The expo will facilitate “important exchanges in the semiconductor industry,” said Penang chief minister Chow Kon Yeow in a news conference, according to local media.
Chow noted an increase in inquiries from Chinese companies related to the supply chain, and said the state is “prepared to welcome” them.
Malaysia has nurtured its semiconductor industry since Intel entered the country in 1972, and Penang in particular has been nicknamed the “Silicon Valley of the East.” But it centers on back-end processes that are labor-intensive and add relatively little value on their own.
In May, Anwar outlined a national strategy to promote the industry’s development, with MYR 25 billion (USD 5.6 billion) earmarked for this purpose. On August 6, Malaysia opened a semiconductor design center that is among the largest in Southeast Asia.
The upcoming expo aims to help the country build a more advanced chip industry as well as strengthen supply chains. The Chinese industry group involved likely also hopes to build closer ties with major semiconductor companies operating in the regional chip hub.
Major American chip companies, including Intel and Texas Instruments, also have made plans to invest in Malaysia. With tensions running high between Washington and Beijing over semiconductors, Malaysia is leveraging its strategic neutrality to attract foreign investment.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.