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PENANG, 28 SEP 2024 – The Soft Launch of “Penang Silicon Design @5km+” initiative was held today at GBS TechSpace. The initiative aims to create a unique and interconnected ecosystem for Integrated Circuit (IC) design and technology enterprises within a 5km+ radius of the Bayan Lepas Industrial Park. Spearheaded by InvestPenang, this ambitious initiative will be supported by attractive incentive packages worth up to RM2 million annually for each company for a three-year period, alongside the establishment of a governance structure to oversee project implementation.

The “Penang Silicon Design @5km+” initiative will offer a comprehensive IC design ecosystem, comprising three key projects: (1) the Penang IC Design & Digital Park @Bayan Lepas, which offers approximately 1 million square feet of premium office space tailored for IC design, research and development (R&D), and digital companies; (2) the Penang Chip Design Academy @PSDC, which provides a comprehensive Chip Design Talent Cultivation Program aimed at upskilling and reskilling fresh graduates and engineers in engineering-related fields—both launched by YAB Chief Minister in May 2024; and (3) the Silicon Research and Incubation Space, designed as a one-stop center to support chip design start-ups and SMEs, for both local and foreign companies, by providing workspaces, state-of-the-art facilities, mentorship, consultation, and research capabilities. Phase 1 of the Silicon Research and Incubation Space will be housed at state-owned GBS TechSpace, featuring a 36,000 square foot facility designed to accommodate up to eight local and international IC design companies, with at least 300 IC design engineers.

To ensure an effective oversight and strategic direction, the “Penang Silicon Design @5km+” initiative is governed by an Executive Council and an Advisory Panel, consisting of representatives from the industry, academia and government agencies. The Advisory Panel is responsible for advising the Executive Council on strategies, budgets, programs, evaluate the proposals and candidates and any matters related to the ‘Penang Silicon Design @5km+’ initiative and provide recommendations to the Executive Council for final approval.

The Executive Council will be chaired by YAB Mr. Chow Kon Yeow, Chief Minister of Penang; alongside members including YB Dato’ Haji Zulkifli Bin Long, State Government Secretary; YB Dato’ Zabidah Binti Safar, State Finance Officer; YBhg Dato’ Aziz Bin Bakar, CEO of PDC and YBhg Dato’ Loo Lee Lian, CEO of InvestPenang.

Additionally, the advisory panel includes  YBhg Dato’ Loo Lee Lian, CEO of InvestPenang (Chairperson); Dr. Hari Narayanan, CEO of PSDC (Deputy Chairperson); Assoc. Prof. Dr. Asrulnizam Bin Abd Manaf, Director CEDEC, USM; Swee Kiang Fong, CEO, SkyeChip Sdn Bhd; Tan Chun Chiat, Co-Founder & COO, Oppstar Berhad; Suresh Kumar, Vice President & General Manager, Intel Malaysia Design Centre, Amar Chhajer, Vice President SEA, & Country Head, UST Malaysia; and Teh J-Wing, Director Silicon Design Engineering, AMD Global Services.

The total investment for the “Penang Silicon Design @5km+” initiative is projected at RM120 million over the next five years. The Penang State Government has committed RM60 million to propel this initiative forward. We are actively pursuing a matching grant of RM60 million, with a proposal of RM31.5 million already submitted to the Ministry of Finance (MOF) through the Ministry of Investment, Trade and Industry (MITI) for consideration in Budget 2025. The remainder of the funding is planned for submission under the 13th Malaysia Plan. This collaboration will position Malaysia and Penang as a prominent leader in the IC design ecosystem, driving innovation and economic growth. Securing additional Federal Government funding and support will be pivotal in ensuring the project’s success and maximising its overall impact.

Penang currently has the highest concentration of IC design-related companies in the nation, with 28 of both local and foreign firms residing in the state.

To attract and support more IC design players establishing and expanding their operations in Penang, the State is offering incentive package schemes, comprising subsidies worth up to RM2 million annually for a three-year period, which will be available to both local and foreign IC design companies based in Malaysia. These incentives, however, will be contingent upon securing the additional RM60 million funding from the Federal Government, ensuring the program’s full implementation and support for industry growth.

The incentive packages include: (1) subsidies of up to 100% for rent, utilities, and parking at state-owned properties; (2) up to 100% subsidies for the use of equipment and tools at shared incubation spaces and stakeholder facilities, providing access to Multi-Project Wafer (MPW) and Engineering Tape-Out services, Electronic Design Automation (EDA) tools, computing resources and servers, as well as IP licensing and support for testing and verification; and (3) talent development incentives offering up to 100% subsidies through the Penang Chip Design Academy.

“As Penang continues to attract more strategic investors, there is a need to establish conducive facilities that can accommodate high value activities in Penang. From today’s ceremony, we hope to showcase the series of proactive initiatives from the Penang State Government to our industrial leaders,” said the Chief Minister of Penang, YAB Mr. Chow Kon Yeow.

“At the very heart of our digital economy growth are the chips that power digital technologies. This signifies the importance of the semiconductor, and IC design industry. We must take concrete steps to maintain our mark in this sphere. As such, I would like to commend the state government for its “Penang Silicon Design @5km+” initiative. This is in line with efforts to make the National Semiconductor Strategy a success and boost the electrical and electronics industry ecosystem in the state. Such a move will also help underscore Penang’s pivotal role as a sustainable IC Design and Research & Development hub,” stated by YB Gobind Singh Deo, Minister of Digital.

The highlight of the “Penang Silicon Design @5km+” initiative will be happening by the end of the year, with Prime Minister YAB Dato’ Seri Utama Anwar bin Ibrahim invited to officially inaugurate GBS TechSpace as the Silicon Research & Incubation Space and to witness the signing ceremony of the Memorandum of Understanding (MoU) with key stakeholders in support of the initiative.

The soft launch ceremony was officiated by YAB Mr. Chow Kon Yeow, Chief Minister of Penang, alongside YB Gobind Singh Deo, Minister of Digital, Malaysia, and attended by representatives from government agencies and industry leaders. With its three key projects and a comprehensive framework, the “Penang Silicon Design @5km+” initiative reinforces Penang’s commitment to cultivating a vibrant and innovative ecosystem for the semiconductor industry, in alignment with the National Semiconductor Strategy.

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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), and Global Business Services (GBS) Focus Group (promoting and developing digital economy). For more information, please visit https://investpenang.gov.my/ and follow InvestPenang’s social media channels: Facebook; LinkedIn; WhatsApp Channel.

About Penang Development Corporation
The Penang Development Corporation (PDC) was established in 1969 as the leading development agency for the Penang State Government. PDC has been tasked to spearhead the socio-economic growth, create employment opportunities and improve the quality of life in Penang. PDC’s main activities include the development of industrial parks, townships and affordable housing. Since its inception, PDC’s strategies in industrial and housing development have enabled Penang to position itself as a leading industrial, tourism and services hub in the region. For more information, please visit http://www.pdc.gov.my/ and follow PDC’s Facebook.

For media enquiries, please contact:

InvestPenang
Elaine Cheah/ Arief Ferdaus
elaine@investpenang.gov.my / arief@investpenang.gov.my
T: +604-646 8833