LEM inaugurates first plant in Malaysia as Penang reaps the long tail of its semiconductor expertise

• Facility in Penang cost an initial US$16.5m, to eventually hire 500 people
• Penang’s expertise in semiconductors a big pull for LEM’s supply chain

Life Energy Motion (LEM) a Swiss company that is a leading player in electrical measurement for renewable energy, automation, power network and e-mobility applications, inaugurated its new US$16.5 million (RM79 million) production plant in Penang, on Fri.

While the investment amount is small when measured against many multinational investments into the silicon state, it is the latest example of the long tail of the state's globally recognised semiconductor expertise and experience. 

Frank Rehfeld, CEO of LEM highlighted the value of Penang’s deep semiconductor domain knowhow.

“The talent and experience available here in Penang will be of significant benefit to LEM, particularly in the domain of semiconductors. This plant will be the main testing base for our integrated current sensor (ICS) products which are in great demand from customers in our automation, automotive and renewable energy businesses. As we develop our manufacturing operations here, we may also consider adding R&D investment and capabilities.”

LEM currently has five R&D sites globally and invested RM170 million or 10.2% of 2022/23 revenue into R&D.

The project was announced in 2020, with the first electric current sensor products already rolling off the production line in Q1 of 2024, providing a further revenue boost to the company which recorded Q3 2023/24 sales of US$348.8 million (RM1.67 billion).

Without giving a time frame, Rehfeld said in his speech at the inauguration that he expects revenue from the plant to eventually exceed US$220 million (RM1.02 billion) a year.

With a current headcount of 70 staff, Rehfeld expects this to rise to 200 people by March 2025 and hit around 500 with an already planned expansion to its current 12,000 sqm site located at Penang Science Park North.

Andreas Hürlimann, Chairman of LEM, explained that Penang was selected as a strategic location to improve its supply chain, increase resilience and better meet its customer needs in Asia, as well as Europe and the US. “This plant will complement our existing facilities in China, Bulgaria and Switzerland as we invest in more capacity to achieve our ambitious but profitable growth objectives in the coming years.”

Chow Kon Yeow, the Chief Minister of Penang, said: “Supply chain resiliency and well-developed ecosystem are among the key differentiators that made Penang a sustainable location for the electrical and electronics (E&E) players. Being a leading company in electrical measurement that serves the emerging and high-growth industries, I am confident that LEM would be able to reap a myriad of benefits from its operation in Penang while complementing the State’s presence in the world map of technology.”

The state, via its InvestPenang and other relevant state agencies would work closely with LEM to ensure smooth project implementation, said Chow.

Arham Abdul Rahman, Malaysian Investment Development Authority’s (MIDA) CEO, said, “We are excited to witness LEM joining and further developing Malaysia’s vibrant E&E ecosystem. We are proud that Malaysia, guided by our National Investment Aspirations (NIA), continues to fit into the overall growth strategy of major foreign companies, solidifying our position as an integrated global manufacturing hub for the industry. We anticipate exciting spillovers from this project, particularly in generating high-skill employment for local talent. LEM can be assured that MIDA will render our full support in facilitating your business in this country.”