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Our Journey

From Seaport to Silicon Valley

Penang steps into the 50th anniversary of its industrialisation journey in 2022. Penang’s transformation, from a traditional seaport economy into the Silicon Valley of the East, began in 1972 when the establishment of Malaysia’s first free trade zone in the State drew key investments from eight Multinational Corporations (MNCs). Their arrivals have heralded the development of a robust ecosystem of ancillary industries, cemented Penang’s conducive location for MNCs’ pioneer offshore manufacturing sites and elevated the State’s status as a prominent hub for advanced manufacturing and high value-added upstream activities.

Penang’s industry transformation journey

• A pioneer location for MNC’s offshore strategy for semiconductor labor-intensive manufacturing activities.


• Local SMEs arising – precision tooling & back-end automation.

• Arising of contract manufacturers to serve the needs of IDMs.


• Surfaced as a location for offshore design & developments activities, Eg: Intel set up a design centre in 2001.

• A key location for global leaders in back-end semiconductor assembly & testing, HDD & LED.

• Emerged as Global E&E players’ preferred site for Center of Excellence & GBS activities.

1990s - 2000s

• One of the critical locations for Apple’s global supply chain.

• Becoming a key manufacturing hub for memory & data storage leaders, OSAT & equipment manufacturing.

• Rise of homegrown non-manufacturing companies, providing IC design & product development & engineering services.

• A new wave of global tier-1 medical device companies establishing their presence in Penang.


• Entrance of front-end equipment manufacturer, Lam Research.

• [2021] Total export: RM354b (5-year CAGR: 13%); Total trade surplus: RM101b (5-year CAGR: 18%).

• [2021] Attracted RM76b investment, 97% are contributed by E&E industry.


Note: * Intel, Hewlett Packard (now Keysight Technologies and Agilent Technologies), Robert Bosch, AMD, Litronix (now ams Osram), Hitachi (now Renesas), Clarion & National Semiconductor (no longer present in Penang following a corporate M&A exercise).

At a glance: Penang is Malaysia’s E&E powerhouse

Total Manufacturing Investment Value

[2019 – 20] – RM31 billion

(18% of Malaysia’s Total)

Total Manufacturing Investment FDI

[2019 – 20] – RM25.6 billion

(23% of Malaysia’s Total)

Estimated Job Creation from Manufacturing Investment

[2019 – 20] – 32,154

Penang’s Exports Value in 2020

RM310 billion

(32% of Malaysia’s Total)

Penang’s Trade Surplus Value in 2020

RM110 billion

(60% of Malaysia’s Total)

Penang’s E&E Exports Value in 2020

RM231 billion

(~60% of Malaysia’s Total)

Penang houses 3 of the Global Top 10 semiconductor leaders (by sales)

Penang houses 6 of the Global Top 30 medical device companies (by sales)