Malaysia to attract fab investors with incentives
By Reuters
30/7/2001
Tax sweeteners and full ownership rights will be offered to foreign investors in Malaysia's emerging silicon wafer fabricator industry in order to compete with established rivals in Singapore and Taiwan, Prime Minister Mahathir Mohamad said.
Mr Mahathir was speaking at the opening of the US$1.45 billion wafer fab Silterra Malaysia, which is 70 per cent owned by state investment arm Khazanah Nasional.
"We are willing to help in terms of tax incentives," he said in the Kulim technology park in the northern state of Kedah. "We will allow 100 percent ownership."
But he said investment proposals for wafer fabrication, a core technology for the semiconductor industry, would be treated on a case-by-case basis.
Silterra's local competitor is 1st Silicon (Malaysia), a foundary set up by the government in the eastern state of Sarawak on Borneo island.
Malaysia is a newcomer in the wafer fabs business, although it is one of the world's biggest exporters of electrical goods and electronic components.
Mr Mahathir said Malaysia could reap 2.2 billion ringgit (US$0.58 billion) a year in foreign exchange earnings once Silterra and 1st Silicon reach optimum levels of production.
Both plants are designed to churn out 30,000 wafers a month, but they are running well below that.
The Silterra facility sits in a sprawling industrial park carved out of an old rubber plantation--the business that was once the economy's backbone.
The park is about an hour's drive from Penang state, where many US and Japanese firms have based electronics plants.
Mr Mahathir said Silterra, which also has Japanese and US investors, should be able to stand the heat of competition from abroad thanks to its state-of-the-art equipment.
There are 28 fabs in Taiwan and 12 in Singapore.
Silterra's products rival those made by Singapore's Chartered Semiconductor Manufacturing and Taiwan Semiconductor Manufacturing Co.
Mr Mahathir said a decision to build another plant would depend on how fast the market, which has suffered from a global downturn, recovers.
Silterra chairman Sheriff Kassim said the company might delay plans to list on the US Nasdaq and local Mesdaq exchanges due to poor market conditions. Earlier it had planned to list in the first half of next year. "We will have to wait and see," he said.
Silterra produces 18,000 eight-inch wafers per month, but expects to hit full capacity by the end of 2002. Its commercial shipments began in March.
"The product that is being shipped today is a very complex chip, used by our customer in a set-top box decoder, either for satellite or cable TV home reception," Mr Sheriff said. |
