July 15 – US-based Applied Engineering (AE) from San Jose, California will be establishing a joint venture (JV) plant with Malaysian counterpart, QES Manufacturing Sdn. Bhd. (QES) in Batu Kawan Industrial Park, Pulau Pinang later this year.

Both parties signed an agreement to establish, Applied Engineering Technology (M) Sdn Bhd (AET), a JV company, to provide high-tech electromechanical contract manufacturing services, from prototyping to high volume production, through its New Product Introduction (NPI) process and advanced custom solutions.

The JV operation is designed to cater to the specific needs of clients in the semiconductor equipment manufacturing, life science and medical devices, defence, and aerospace market segments, not only in Malaysia, but also to ASEAN countries and China.

The proposed initial investment for AET is approximately RM5 million, with an initial workforce of 20 workers, comprising mainly engineers and technicians. The investment is set to expand up to RM20 million over the next three (3) years. The company looks to kick-start its operations in a temporary premise before moving to its new factory in Batu Kawan Industrial Park during the fourth quarter of 2022.

Mr. Arham Abdul Rahman, Chief Executive Officer of the Malaysian Investment Development Authority (MIDA) remarked, “The electrical and electronics (E&E) and related services industries continue to assume a critical role in Malaysia’s industrial development as they are part of the critical global supply chain and ecosystem to support other high technology industries. Over the years, Malaysia has developed a reputable skilled talent pool, facilitative investment environment, as well as deep integration with international supply chains, offering the ideal mix for high-tech investors in the industry.”

“MIDA is optimistic that AE’s presence here will further boost the development of our high technology equipment ecosystem, enable more opportunities for our local vendors and spur high-employment for Malaysian. Our MIDA office in San Jose has been working closely with AE since December 2019; and in May 2021, AE and QES signed a Memorandum of Understanding (MOU). This JV is in line with MIDA’s strategies to attract high-tech companies to invest in the country, and expand domestic linkages into regional and global supply chains, as per the National Investment Aspirations (NIA). We are proud to witness AE choosing Malaysia for its first overseas investment,” Mr. Arham added.

The President of AE, Mr. Jack Yao expressed appreciation for MIDA’s efforts in facilitating, supporting and expediting the company’s JV undertaking in Malaysia and finding a suitable partner in QES. “Malaysia will provide the launching pad to AE’s strategical move to expand outside USA to service its major customers in Malaysia and the Asia Pacific. AE will bring its latest generation of high-end technologies to Malaysia and builds up a whole new technology sector. A significant number of R&D activities are also planned for this new location. Malaysia can benefit its position as a technology-country and can strengthen the region as a high-tech manufacturing hub in Asia Pacific.”

Mr. Chew Ne Weng, President of QES Group Bhd., also thanked MIDA for the introduction of AE to QES. “Being a joint-venture partner here, we will play our role to support this high technology equipment manufacturing project using our established networks across ASEAN, China and other parts of Asia for AET to expand from Malaysia. QES hopes to leverage the well-established and technical strength of AE to further improve our manufacturing capabilities. Together with MIDA, QES anticipates AET will create a sustainable high technology equipment manufacturing eco-system within E&E and medical segments for Malaysia,” said Mr. Chew.

AE through this JV with QES with benefit from the enlarged ASEAN market of 662 million people. The project also stands to reap the benefits of Malaysia’s various Free Trade Agreements, both bilaterally and those under the auspices of ASEAN.

Source: MIDA