Intel is investing up to $7.1 billion on new chip packaging facilities in Malaysia, a major step in which it aims to strengthen its global footprint and address the global semiconductor shortage expected to continue through 2023.

The company’s CEO, Pat Gelsinger, said in a press statement today, Thursday, that “Intel” is allocating more than 30 billion ringgit to expand its capabilities in the country, and part of it will be allocated to finance the construction of a new packaging plant, and production is expected to start in 2024.

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global expansion
The project represents a big bet for Malaysia, which is emerging as a global center for semiconductor testing and assembly, as the US chip maker plans to boost its potential on Penang Island by creating a sprawling complex serving industries from automobiles to electronics across Asia.

It’s part of a global expansion that comes as Gelsinger moves to stem its market share losses, and customer flight caused in part by faltering technology development.

Gelsinger took over the leadership of the largest US chip maker in February, tasked with reclaiming the industry’s leadership position from Asian giants such as Taiwan Semiconductor Manufacturing.

And he clarified Thursday that “Intel” plans to outline its expansions in the United States and Europe next year.

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The chip crisis continues into 2023
Meanwhile, years of underinvestment in the global industry and a surge in computing hardware demand in the age of Covid have caused an unprecedented shortage of semiconductors that are essential for everything from cars to smartphones. And Gelsinger, who has said that demand for chips has increased by 20% during the pandemic overall, expects the semiconductor crisis to continue into 2023.

Gelsinger headed to Taiwan and Malaysia this week for talks underlining how Asian industrialization will be critical to his development efforts.

That trip included plans for a meeting with leaders of Taiwan Semiconductor Manufacturing, according to people familiar with his schedule.

Intel needs Taiwan Semiconductor’s advanced manufacturing services and plans to compete with the Taiwanese company in the so-called foundry business, which is a tough balance for the CEO. In addition to Malaysia; Intel is also running a factory in Dalian, China.

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Government financial support
This is Gelsinger’s first trip to Asia since taking over as Intel’s CEO, and comes at a time when he is pressing the US government to allocate money to the country’s chip industry, giving it only to local chipmakers. He argued that overseas manufacturers – such as Taiwan Semiconductor and Samsung Electronics, which have plans to build factories in the US – should not get paid under the “chip law”, which passes political approval in Washington. . As part of these efforts, he said, the concentration of advanced manufacturing in Asia and Taiwan poses a strategic risk.

Malaysia alone accounts for 13% of the world’s chip testing and packaging, a major step in getting semiconductors ready for use in cars, phones, and other devices, and Penang has emerged as the hub for the country’s electrical and electronics.