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New Smart Factory to Launch in Batu Kawan, Malaysia

A provider of Electronic Manufacturing Services (EMS) has announced plans to construct a Smart ‘Lights-Out’ Factory 4.0 in Batu Kawan, Penang, with an estimated cost of RM180 million. This development is expected to bring about significant changes in the Northern Peninsular region.

The factory will be involved in the production of Optical Modules, which are new 5G Advanced High Speed Optical Signal Transmitter and Receiver components for 5G wireless networks. The factory will use photonics and semiconductor technologies acquired through technology transfer from its US-based customer.

Construction of the Batu Kawan plant began in January 2023 and is expected to facilitate the first-ever technology transfer in Southeast Asia. This development is expected to enhance the skillset and competitiveness of the local workforce, and the plant is anticipated to hire around 1,000 highly skilled individuals once completed in the first half of 2024.

As part of their expansion plan announcement, the provider welcomed a delegation from the Malaysian Investment Development Authority (MIDA) to their location in Sg. Petani. The delegation was led by the Deputy Chief Executive Officer (Investment Development) and included the Senior State Executive Council Member (Kedah) and a Member of Parliament from Kubang Pasu, Kedah.

The EMS provider which currently employs approximately 3,000 staff, (representing about 1% of the Sg. Petani population), has expressed its intention to collaborate with local universities and colleges in actively training fresh graduates to become industry-savvy. Their “hire local first” policy prioritises employing Malaysians from the surrounding area, thus reducing their dependency on foreign labour.

The Deputy Chief Executive Officer (Investment Development) of MIDA extended congratulations to the EMS provider, stating that they are pleased to see the company actively collaborating with local universities and colleges to train fresh graduates and improve their industry knowledge.

The company’s “hire local first” policy was also applauded for providing job opportunities to Malaysians in the surrounding area and reducing dependency on foreign labour, which in turn enhances the livelihoods of locals. These expansion plans are in line with the National Investment Aspirations (NIA) of attracting high-value investments to promote sustainable and comprehensive economic growth.

She added that Malaysia welcomes the firm’s expansion project, which utilises cutting-edge 5G technology, aligning with the government’s mandate for MIDA to drive the rapid digital transformation of the manufacturing sector. This development is expected to lead to improvements in productivity, job creation, and the enhancement of the skill set of Malaysians.

The new plant will implement the Lights-Out methodology, creating a fully networked environment that digitises material flow for autonomous manufacturing. A remote team of highly specialised experts will be responsible for data management, production planning, and quality control.

In addition to the Batu Kawan plant, the EMS provider is expanding its presence by constructing Smart Warehouses and an International Procurement Centre, which will feature Kedah’s first Vendor Management Inventory (VMI) system. These facilities, with a total cost of RM40 million, will cater to the provider’s own growing requirements and those of the surrounding industrial clusters in Sg Petani, Kedah, and Batu Kawan, Penang. The completion of these facilities is expected to be in 2024.

According to the firm’s Chief Executive Officer (CEO), the development of smart facilities is timely, given the Group’s expansion journey. The company has progressed from providing Printed Circuit Board Assembly (PCBA) and full-product box-build assembly to producing upstream 5G routers and soon 5G optical modules.

The provider aims to collaborate more closely with government authorities and agencies such as MIDA to increase the economic value of the state. Their current plant in Sg. Petani has already benefited from grants that encourage exports and innovation, and they hope to receive continued support for their future expansion plans.

In addition to grants, they appreciate open sessions for dialogue and feedback on current policies, so that government agencies can stay informed about the latest developments and challenges faced by industry players and formulate mutually-beneficial solutions.


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