Infineon invests $1b in Malaysian chip plant

Leading chip-maker Infineon has formally opened a US$1 billion semiconductor plant in Malaysia in an attempt to hold onto its global lead in the power semiconductor market. 

Such was the urgency of the project that it has gone from inception to initial production in just 18 months.

Munich-based Infineon is currently the world's largest supplier of power semiconductors in revenue terms, but is closely followed by STMicroelectronics and others. 

Infineon held 9.3 per cent of the highly-competitive US$11.35b market last year, according to IMS Research data supplied by the company. 

Power semiconductor chips produced at the new plant will allow for smaller and lighter power supplies, and safer, more fuel-efficient cars, according to Infineon.

The chip maker aims to feed a growing demand for products that use energy more efficiently as oil and other energy prices rise. IMS Research predicted last year that the power semiconductor market would grow 8.4 per cent per year.

Power semiconductors are also helping to meet car owners' demands for more comfort, according to Chris Webber, a vice president at Strategy Analytics.

"Power semiconductor demand is being assisted by the growing number of actuators in comfort and convenience systems such as climate control and seating, and new developments like active steering and adaptive headlamp control systems," he said.

Dr Wolfgang Ziebart, chief executive at Infineon, said: "Our new fab is a strategic investment in our future and an opportunity to address the world's growing demand for more efficient power controls in industrial, computing and household appliances by enabling variable speed-controlled electric motors with higher performance.

"This new fab is an important step in continuing our successful business with chips for automotive and industrial power applications."

The Malaysian plant will employ about 1,700 workers when it reaches full capacity, and accept 100,000 8in (200mm) wafers per month.

Each wafer is divided into hundreds of individual chips, the precise number depending on the chip's size which varies according to application.

Infineon's huge investment is also an important milestone for northern Malaysia's Kulim Hi-tech Park, which is striving to attract investment from the semiconductor industry. 

The business park already hosts companies including Intel, Celestica, Applied Materials and BASF. 

Kulim is part of Malaysia's gargantuan Multimedia Super Corridor project, a 30-year, government-led, multi-billion dollar initiative to transform the country into a knowledge-based economy. 

Malaysia's government has recently denied allegations that the project, started in 1996, is in fact a white elephant and has failed to meet its objectives.

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