Penang launches “Penang Silicon Design @5km+” initiative – advancing Malaysia in global IC design and AI

• Penang State Govt has allocated US$13 mil to support the initiative
• Aims to transform M’sia’s semiconductor industry, aligned with the NSS

Prime Minister Anwar bin Ibrahim, alongside Penang chief minister Chow Kon Yeow, officially launched the “Penang Silicon Design @5km+” initiative. The event also marked the opening of GBS TechSpace as the Silicon Research and Incubation Space. During the ceremony, the prime minister acknowledged the memorandums of understanding (MoUs) signed between InvestPenang and key technology collaborators, as well as the recipients of newly announced incentives. Additionally, Penang unveiled the new global companies joining the Penang IC Design and Digital Park.

Spearheaded by the Penang State Government through its lead agency, InvestPenang, the “Penang Silicon Design @5km+” initiative is set to transform Malaysia’s semiconductor industry, fully aligning with the National Semiconductor Strategy (NSS). This initiative marks a pivotal move into the front end of the semiconductor value chain, accelerating the AI revolution and positioning the nation at the forefront of global technological innovation.

According to InvestPenang, this ambitious initiative offers a comprehensive IC design ecosystem comprising three key components:

1. The Penang IC Design and Digital Park @Bayan Lepas, developed by the Penang Development Corporation, provides approximately 1 million square feet of premium hybrid office and lab space tailored for IC design, research and development, and digital companies.
2. The Penang Chip Design Academy @Penang Skills Development Centre delivers a Chip Design Talent Cultivation Programme aimed at upskilling and reskilling at least 500 fresh graduates and engineers in IC design-related fields over the next two years.
3. The Silicon Research and Incubation Space @GBS TechSpace serves as a one-stop innovation hub to support chip design companies, offering cutting-edge infrastructure, design services, essential electronic design automation (EDA) tools, intellectual property, and expertise in packaging and technical disciplines for new product introduction preparation. Supported by InvestPenang’s technology collaborations, this facility is expected to become fully operational by the end of April 2025.

To enable end-to-end design processes, InvestPenang has signed MoUs with technology collaborators including Cadence, Siemens, and Synopsys for EDA tools; SilTerra, Universiti Sains Malaysia, and CEDEC for multi-project wafer services; and Globetronics and Inari Amertron for packaging solutions. Additionally, companies such as Aemulus, Experior, Emerson NI, and Keysight Technologies will provide post-silicon validation and support for new product introduction readiness. Government agencies such as Cradle, Collaborative Research in Engineering, Science and Technology (CREST), and MIMOS will also offer technical expertise and resources.

These collaborations extend to AI-driven tools and technologies, amplifying the role of the “Penang Silicon Design @5km+” initiative in driving Malaysia’s AI revolution, InvestPenang stated.

The Penang State Government has allocated US$13.5 million (RM60 million) to support this initiative, offering up to US$451,000 (RM2 million) annually in incentives per eligible company. These incentives cover subsidies for space and utilities at GBS TechSpace, access to technology collaborators’ facilities, and talent development programmes through the Penang Chip Design Academy. The federal government has also shown strong support, with the Ministry of Economy approving initial funding for 2024.

Penang is committed to fostering local firms within the semiconductor design space. Five local companies—Filpal, Infinecs Lab, Silicon X, SkyeChip, and Sophic Automation—have been selected as the inaugural occupants of the Silicon Research and Incubation Space at GBS TechSpace. These firms will benefit from the newly announced incentive packages, aligning with the NSS’s target to develop ten Malaysian companies in design and packaging.

The event also highlighted the establishment of five global giants—Alchip, AMD Global Services, Celestica, Microsoft, and Monolithic Power Systems—at the Penang IC Design and Digital Park to house their new IC design and R&D operations. The presence of these industry leaders is expected to drive significant spillover effects to local start-ups, fostering knowledge transfer and sparking innovation across the sector.

With these developments, Penang now hosts over 40 IC design-related local and international companies, establishing itself as Malaysia’s IC design hub with the largest cluster of such companies in the country. The Penang government expressed its gratitude to the Ministry of Investment, Trade and Industry (MITI) for their ongoing collaboration in attracting high-value projects, further solidifying Penang’s position in the semiconductor industry.

Chow Kon Yeow, chief minister of Penang, stated: “The launch of the Penang Silicon Design @5km+ initiative is a strategic move to strengthen Penang’s leadership in the IC design industry. With its integrated ecosystem within the vibrant 5km+ area, the initiative offers a unique value proposition, benchmarking itself against IC design hubs in Silicon Valley in San Jose, USA, and Taiwan.”

“Through this initiative, Penang is positioning itself at the intersection of IC design and AI, setting the stage for the next phase of technological evolution in Malaysia and Southeast Asia,” he added.

The event showcased cutting-edge technologies and solutions from InvestPenang’s key technology collaborators and attracted over 500 participants. Among the attendees were Tengku Zafrul bin Tengku Abdul Aziz, minister of Investment, Trade and Industry; Amir Hamzah bin Azizan, second minister of Finance; Steven Sim Chee Keong, minister of Human Resources; Lim Hui Ying, deputy minister of Finance; and representatives from government agencies, semiconductor, digital, and IC design companies in Penang, as well as academic institutions. This occasion underscored the strong collaboration between the public and private sectors, further cementing Penang’s position as a global leader in IC design and AI innovation while reinforcing Malaysia’s status as the only Southeast Asian nation with an integrated semiconductor ecosystem.