Penang launches ATE Campus to drive Malaysia’s industrial transformation

• US$10 mil land commitment and 11 MoUs anchor early industry participation
• Penang strengthens position as Malaysia’s ATE hub amid rising global demand

The Penang State Government has launched the Penang Automation, Test and Equipment (ATE) Campus, an initiative aimed at positioning the ATE sector as a key driver of Malaysia’s industrial transformation.

Officiated by the chief minister of Penang, Chow Kon Yeow, alongside Steven Sim Chee Keong, minister of Entrepreneur Development and Cooperatives, the initiative aims to accelerate the co-development, qualification and scaling of Malaysian ATE solutions by enabling first-customer deployment through structured collaboration between local companies and global manufacturers within a standards-driven ecosystem that reduces deployment risk and supports adoption in real production environments.

Spearheaded by InvestPenang, the initiative will be implemented in two phases. Phase One focuses on building collaborative platforms such as field labs, training programmes and localisation pathways aligned with real production requirements. Phase Two will explore the development of a dedicated physical campus inspired by the Brainport Industries Campus, bringing together qualified suppliers under shared production and qualification standards to form an integrated manufacturing ecosystem.

Chow said, “By strengthening collaboration and building deeper local capabilities, we believe Penang can continue to play a leading role in shaping the future of advanced manufacturing in the region.”

To support the initiative, the Penang State Government has committed 10 acres of land valued at approximately US$10 million (RM40 million) through the Penang Development Corporation, as announced in March 2026. Further funding support is being explored in collaboration with the Federal Government to accelerate the development of key enablers, particularly training programmes and shared laboratory facilities.

The launch also marks the start of localisation pathways for participating MNCs. A total of eleven memorandums of understanding between MNCs and InvestPenang were recognised to facilitate pilot projects and localisation opportunities. The participating MNCs include ams OSRAM, AT&S, B. Braun, TF-AMD Penang, Intel Malaysia, Keysight, Renesas, Sandisk, Smith & Nephew, Texchem and Waferwise.

The Penang ATE Capability Map was also unveiled, highlighting local capabilities across semiconductor front-end, advanced packaging, conventional packaging, EMS/ODM and MedTech sectors. The map supports localisation efforts in line with the Malaysian Investment Development Authority’s New Incentive Framework.

In conjunction with the launch, InvestPenang presented the ATE Policy Recommendation White Paper to the Ministry of Investment, Trade and Industry, outlining measures to strengthen Malaysia’s ATE ecosystem and global competitiveness. Over the past five decades, the country has built a strong reputation as a trusted partner in the global semiconductor industry, particularly in assembly, testing and packaging (ATP), contributing approximately 13% of the global ATP market.

In 2025, Malaysia recorded US$19.5 billion (RM78 billion) in exports of machinery, equipment and parts, reflecting a 13.5% year-on-year increase and highlighting growing demand for advanced manufacturing solutions.

Penang plays a central role in this ecosystem, hosting the highest concentration of ATE companies and ecosystem partners in Malaysia, supported by more than 100 automation machinery, precision engineering and component companies.

[RM1 = US$0.25]

Among these, nineteen companies are listed on Bursa Malaysia, with a combined market capitalisation of approximately RM27 billion as of April 2026 and aggregated annual revenue of nearly RM5 billion. Four of these companies have surpassed RM500 million in annual revenue, signalling progress towards Malaysia’s National Semiconductor Strategy target of developing “10+100 local champions.”

Between 2020 and 2025, Penang recorded RM25 billion in approved manufacturing investments in the machinery and equipment sector, representing 40% of Malaysia’s total investments in this segment, reinforcing the state’s importance in the global manufacturing value chain.

The Penang ATE Campus represents a significant step towards strengthening Malaysia’s ATE ecosystem. By deepening collaboration between MNCs and local industry players, the initiative aims to accelerate capability development, enable technology transfer and unlock new growth opportunities.

While initially focused on semiconductors, the model is designed to scale across sectors such as MedTech, AgriTech, defence and advanced industries, positioning ATE as a key enabler of Malaysia’s broader industrial transformation.