KUALA LUMPUR: Simmtech Holdings Co Ltd, a South Korean-based global leading manufacturer for printed circuit board (PCB) and packaging substrate for semiconductors, is on track to finish building its first large scale factory in Southeast Asia in Penang.

Despite the challenges due to the onset of Covid-19, the company said construction of the facility at the Batu Kawang Industrial Park was right on track and scheduled for completion in the first quarter of 2022.

"The factory will be manufacturing the region's first packaging substrates for dynamic random-access memory (DRAM)/NAND memory chips and high-density interconnect (HDI) PCB for memory module/solid state drive (SSD) devices.

"The operations are expected to commence in the second quarter next year," it said.

Simmtech Southeast Asia managing director Jeffery Chun said given the supply constraint globally, it was absolutely critical that the company's Penang project went full swing to manage the supply chain.

"With the synergistic support from the Federal government agencies especially Malaysian Investment Development Authority (MIDA) and the state government agencies, our greenfield project is chartering at lightning speed to ramp up capacity to our major customers in this region" said Chun.

MIDA chief executive officer Datuk Arham Abdul Rahman said the electrical and electronics (E&E) manufacturing industry was rapidly evolving.

Arham said MIDA was targeting more front-end and back-end semiconductor players as well as their supply chains to consider Malaysia as an alternative site for their production.

"MIDA welcomes Simmtech and their prospects in nurturing Malaysians to equip themselves with the technological skills for the current industry's needs and beyond. We are confident that Simmtech will only stand to gain here in Malaysia," he said.

The project will be invested via Simmtech's subsidiary Sustio Sdn Bhd with the total investment of RM508 million, benefitting local businesses with opportunities to be integrated in the global value chain.

The new factory is anticipated to create more than 1,000 high-skilled jobs in engineering, manufacturing and quality management, by the first half of 2022.

Furthermore, through the new substrate and PCB factory, Malaysia's robust ecosystem as a hub for advanced manufacturing will be strengthened, while serving as an important link in driving the global semiconductor value chain.

Chun said with this co-development programme with its key customers, the company was confident that its project would be completed in time and primed for the market.

"As one of the world's largest players in the semiconductor industry, the Penang factory served as a manufacturing plant for the region's first packaging substrates. This will position Simmtech as a differentiator from our competitors, thereby jumpstarting the dynamics of global chips shortage," he added.