Semiconductor manufacturer X-FAB Silicon Foundries plans to invest MYR500 million ($114 million) to expand the capacity and capabilities of its foundry operation in Kuching, Sarawak, to meet accelerating demand for its core technologies – the 0.18µm and 0.35µm process platforms.
The Sarawak company, X-FAB Sarawak Sdn Bhd, has grown its revenue by 25 per cent in 2013 and again in 2014. The group believed that similar growth can be expected for 2015 to 2017, throughout which the group intends to invest a total of MYR500 million.
The investment includes capex spending amounting to MYR125 million ($29 million) in the current year.
X-FAB is a leading analog/mixed-signal and micro-electro-mechanical systems foundry group manufacturing silicon wafers for automotive, industrial, consumer, medical and other applications.
It said, its Malaysian operation has transitioned from a manufacturing facility for commodity-type products into a high-value-add business for products with a long life cycle.
In 2016, the group expects X-FAB Sarawak’s operations to contribute over 50 per cent of X-FAB Group’s total revenue.
Since it became part of the X-FAB Group in 2006, the site in Kuching has undergone a complete change in most of its technology portfolio, application focus, customer base, product life cycles and quality systems, the group said, in its press release.
Minister of International Trade and Industry Mustapa Mohamed commended X-FAB Sarawak for being at the forefront of the local semiconductor manufacturing industry. It is one of the two pure-play semiconductor wafer foundries in Malaysia.
“The decision made by X-FAB to expand its operation in Malaysia is testament to the country’s strong economic fundamentals and the capabilities of our local talent,” Mohamed said.
“X-FAB’s operation in Sarawak has been driving the growth of local economy. They are employing over 1,000 staff where more than 80 per cent are considered to be high income earners. We believe that this expansion will act as a catalyst in attracting other high technology firms to establish their operations in Malaysia as they will be able to leverage on the wafer fabrication services provided by X-FAB,” he added.
X-FAB Silicon Foundries SE chairman Tarmizi Sulaiman said: “The state of Sarawak as a major shareholder is very satisfied with the recent development of both the X-FAB Group and, more specifically, the profitable growth of X-FAB Sarawak.”
X-FAB chief executive officer Rudi De Winter commented on the nine years of successful conversion and expansion of the Sarawak foundry operation.
“During this period, we changed the digital business into a more future-oriented business with our complex analog/mixed-signal technologies. These technologies primarily used for automotive, industrial and medical applications enabled us to build a stable and sustainable customer base,” he said.
X-FAB has five manufacturing sites in Germany, Malaysia and the USA, with a combined capacity of around 72,000 eight inch equivalent wafer starts per month. The group employs around 2,500 employees worldwide.