KUALA LUMPUR: Penang is elevating itself for phase "2.0" of its semiconductor evolution, said its Port Commission chairman Datuk Yeoh Soon Hin.
Yeoh said the state is moving beyond electronics manufacturing towards innovation, high-tech integrated circuit (IC) design and global trade integration.
"Penang is elevating itself into becoming the 'Silicon Valley of the East 2.0'.
"This next chapter for Penang is not just about scale in manufacturing but becoming a centre for innovation, advanced design and a key player in the global semiconductor trade.
"We are confident that chips designed and manufactured in Penang will increasingly find their place on the global stage," he said in a statement on Thursday (May 7) after attending the opening of Semicon South-East Asia (Semicon SEA) 2026, held at the Malaysia International Trade and Exhibition Centre (Mitec) here.
Yeoh said the 'Silicon Valley of the East 2.0' vision reflects Penang's transition after over five decades as a global hub for semiconductor assembly and testing.
"The shift is towards higher value creation encompassing IC design, advanced packaging and artificial intelligence (AI) hardware development.
"This transformation moves Penang from being primarily a contract manufacturer to becoming a creator and designer within the global supply chain.
"Based on our data, Penang is now home to approximately 45 IC design companies," he said.
Yeoh said initiatives such as Silicon Design @5km+ are accelerating the development of Malaysian-designed chips and strengthening Penang's position in the global semiconductor ecosystem.
"The semiconductor sector has become one of Penang's most important economic pillars, contributing significantly to state gross domestic product (GDP).
"As the value chain expands from downstream activities into research, development and design, Penang is poised for a higher level of economic growth," he said.
Yeoh shared that Semicon SEA, themed "Transform Tomorrow", brings together global players across the semiconductor value chain, including chip design, wafer fabrication, advanced packaging and testing, as well as equipment and materials suppliers.
He said he visited several Penang-based companies showcasing capabilities in IC assembly and testing, automation systems, precision engineering and electronics manufacturing services (EMS), underscoring the maturity and breadth of Penang's semiconductor ecosystem.
"Penang Port plays a strategic role in supporting the semiconductor industry as a critical artery linking Penang manufacturers to global markets.
"Efficient maritime connectivity enables the smooth import of raw materials and export of finished products, reinforcing Penang's position as a key semiconductor manufacturing and trading hub," he said.
Yeoh said it was important for Penang Port to support the Silicon Design @5km+ initiative led by Invest Penang.
It is a RM120mil, five-year programme aimed at transforming Penang into a global IC design centre.
"Centred around Bayan Lepas, the initiative nurtures a vibrant ecosystem within a 5km radius, integrating IC design and digital parks, the Penang Chip Design Academy, as well as research and incubation facilities.
"More 'Penang-made' integrated circuits are now being deployed in automotive electronics, medical devices, smart manufacturing and consumer electronics," he said.
He said Penang's strong industrial base, efficient logistics infrastructure, policy stability and multilingual talent pool continue to attract global investors and trading partners, particularly amid ongoing global supply chain realignments.
"International exhibitions such as this one provide Penang companies with direct access to buyers and partners from Europe, the United States and across Asia, while positioning Penang as a regional procurement and distribution hub.
"Local companies are working closely with universities and training institutions to build a pipeline of engineers, technicians and research and development professionals, as well as encouraging young Malaysians to seize opportunities in the high-technology sector.
"This exhibition has further strengthened regional industry linkages and opened new avenues for Penang companies to expand internationally, attract investment and grow global trade presence," he said.
