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Driving co-development, localisation and deployment of Malaysian ATE solutions

PENANG, 24 APR 2026 – The Penang State Government today officially launched the Penang Automation, Test and Equipment (ATE) Campus, a strategic initiative aimed at positioning the ATE sector as the next engine for Malaysia’s industrial transformation.

Officiated by the Chief Minister of Penang, the Right Honourable Mr. Chow Kon Yeow, alongside YB Mr. Steven Sim Chee Keong, Minister of Entrepreneur Development and Cooperatives, the initiative is designed to accelerate the co‑development, qualification, and scaling of Malaysian ATE solutions by enabling first-customer deployment through structured collaboration between local companies and global manufacturers, within a trusted and standards-driven ecosystem that reduces deployment risk and supports adoption in real production environments.

Spearheaded by InvestPenang, the initiative will be implemented in two phases: Phase One focuses on building collaborative industry platforms —such as field labs, training platforms and localisation pathways—aligned with real production requirements, while Phase Two will explore the development of a dedicated physical campus inspired by the Brainport Industries Campus, bringing together qualified suppliers under shared production and qualification standards to form an integrated manufacturing ecosystem that global companies can engage with confidently.

The Chief Minister of Penang, the Right Honorable Mr. Chow Kon Yeow said, “By strengthening collaboration and building deeper local capabilities, we believe Penang can continue to play a leading role in shaping the future of advanced manufacturing in the region.”

To support the initiative, the Penang State Government has committed 10 acres of land valued at approximately RM40 million through the Penang Development Corporation, as announced in March 2026. Further funding support is being explored in collaboration with the Federal Government to accelerate the development of key enablers, particularly training programmes and shared laboratory facilities under the Penang ATE Campus.

The launch also marks the start of localisation pathways for the participating MNCs. A total of 11 Memorandums of Understanding (MoUs) signed between MNCs and InvestPenang were recognised to facilitate pilot projects and localisation opportunities. The involved MNCs are ams OSRAM, AT&S, B. Braun, TF-AMD Penang, Intel Malaysia, Keysight, Renesas, Sandisk, Smith & Nephew, Texchem and Waferwise.

The Penang ATE Capability Map was also unveiled, highlighting local capabilities across semiconductor front-end, advanced packaging, conventional packaging, EMS/ODM, and MedTech sectors. The capability map supports localisation efforts in line with the Malaysian Investment Development Authority’s (MIDA) New Incentive Framework.

In conjunction with the launch, InvestPenang also presented the ATE Policy Recommendation White Paper to the Ministry of Investment, Trade and Industry (MITI), outlining policy recommendations to further strengthen Malaysia’s ATE ecosystem and global competitiveness.

Over the past five decades, Malaysia has built a strong reputation as a trusted partner in the global semiconductor industry, particularly in assembly, testing and packaging (ATP) activities, contributing approximately 13% in the global ATP market. In 2025, Malaysia also recorded RM78 billion in exports of machinery, equipment and parts, reflecting a 13.5% year-on-year increase and highlighting the growing demand for advanced manufacturing solutions.

Penang plays a central role in this ecosystem, hosting the highest concentration of ATE companies and its ecosystem partners in Malaysia that enable ATP activities. The industry cluster is supported by more than 100 automation machinery, precision engineering and component companies

Among the ATE companies and its ecosystem partners in Penang, 19 of them are listed in Bursa Malaysia, with a combined market capitalisation of approximately RM27 billion as of April 2026 and aggregated annual revenue of nearly RM5 billion. Four of these local companies have surpassed RM500 million in annual revenue, signalling progress towards the aspirations of Malaysia’s National Semiconductor Strategy to develop “10+100 local champions.”

Between 2020 and 2025, Penang recorded RM25 billion in approved manufacturing investments in the machinery and equipment sector, representing 40% of Malaysia’s total investments in this segment and reinforcing the state’s importance in the global manufacturing value chain.

The Penang ATE Campus represents a significant step toward strengthening Malaysia’s ATE ecosystem. By strengthening collaboration between MNCs and local industry players, the initiative will accelerate capability development, enable technology transfer and unlock new growth opportunities for Malaysian firms.

While the initial focus is on semiconductors, the model is designed to scale across sectors such as MedTech, AgriTech, defence and advanced industries, as Penang continues to co-engineer the future of advanced manufacturing and positioning ATE as a key enabler of Malaysia’s broader industrial transformation.

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About InvestPenang
InvestPenang is the Penang State Government’s principal agency for the promotion of investment. Its objectives are to develop and sustain Penang’s economy by enhancing and continuously supporting business activities in the State through foreign and local investments, including spawning viable new growth centers. To realise its objectives, InvestPenang also runs initiatives like the SMART Penang Center (providing assistance to SMEs), Penang CAT Center (for talent attraction and retention), Global Business Services (GBS) Focus Group (promoting and developing digital economy), Penang Silicon Design @5km+ (establishing a unique and interconnected ecosystem for IC design and technology enterprises) and Penang ATE Campus (accelerating the co‑development, qualification, and scaling of Malaysian ATE solutions by enabling first-customer deployment). For more information, please visit https://investpenang.gov.my/ and follow InvestPenang’s social media channels: Facebook; LinkedIn; WhatsApp Channel and TikTok.

About Penang ATE Campus Initiative
The Penang Automation, Test and Equipment (ATE) Campus, spearheaded by InvestPenang, is established as a strategic initiative aimed at positioning the ATE sector and as the next engine for Malaysia’s industrial transformation. It aims to accelerate the co‑development, qualification, and scaling of Malaysian ATE solutions by enabling first-customer deployment through structured collaboration between local companies and global manufacturers, within a trusted and standards-driven ecosystem that reduces deployment risk and supports adoption in real production environments. Aligned with the National Semiconductor Strategy, this initiative represents a transformative collaboration between government, academia and industry to drive technological advancement, deepen local capabilities and enhance supply chain resilience.

For media enquiries, please contact:
InvestPenang
Elaine Cheah/ Arief Ferdaus
elaine@investpenang.gov.my / arief@investpenang.gov.my
T: +604-646 8833

Penang ATE Campus Initiative
William Chen
william@investpenang.gov.my
T: +604-646 8833