[News] Overseas Expansion of Testing and Packaging Facilities – Japan, Malaysia, and Singapore Emerge as Top Choices

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As the global semiconductor landscape undergoes restructuring, major packaging and testing companies are actively establishing overseas advanced packaging capacities. According to a report from Commercial Times, semiconductor industry sources have indicated that, in terms of the clustering effect within the semiconductor industry, the primary targets currently include Japan, Malaysia, and Singapore.

Industry sources cited by the same report have pointed out that the global top ten packaging and testing companies are dominated by Taiwan, China, and the United States. Taiwan holds the lead with five industry giants including ASE Group, Powertech Technology, King Yuan Electronics CO. (KYEC), Chipbond Technology, ChipMos and Sigurd.

China boasts four key players such as Jiangsu Changjiang Electronics Technology Co., Tongfu Microelectronics, and Huatian Technology Co. Meanwhile, the United States is represented by Amkor, the world’s second-largest in scale. Japan’s pursuit of rebuilding the packaging and testing industry through a foundry model and seeking support from Taiwanese companies can be seen as a logical progression.

Given that nine out of the top ten packaging and testing companies are located in the Asia-Pacific region, the strategic positioning in Asia is particularly notable, with Japan, Malaysia, and Singapore all striving to make their mark.

Industry sources cited by the same report point out that Malaysia has been developing its semiconductor industry for decades, with Penang being a prominent semiconductor hub. Not only does Penang boast technological advantages, but it is also dubbed the “Silicon Valley of the East.”

As companies like TSMC, Samsung, and Intel expand their fabs to locations such as the United States and Europe, the downstream semiconductor testing and packaging activities are gradually forming clusters in Malaysia. This includes ASE Group’s significant investment in building a new testing and packaging facility in Penang, scheduled for completion in 2025.

Intel is also planning to establish advanced packaging facilities in both Penang and Kedah. Additionally, Texas Instruments from the United States has announced plans to build semiconductor testing and packaging facilities in Kuala Lumpur and Malacca.

While Malaysia’s testing and packaging sector has become a hub, industry sources cited by the report point out that despite many countries aggressively building their semiconductor industry chains, Japan is seen as the country, outside of Taiwan, with the most comprehensive semiconductor supply chain in the future, due to factors such as cultural traits, industrial development experience, geographical proximity to Taiwan, and long-standing close cooperation.

TrendForce has previously reported that Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

With Japan rapidly catching up in development, it becomes necessary for companies like ASE Group to strengthen their presence in Japan. The sources cited by the report are optimistic that Taiwanese-owned testing and packaging facilities may follow suit.

Recently, Powertech Technology Inc., Taiwan’s testing and packaging company, expressed openness to exploring opportunities in Japan, including seeking subsidies from the Japanese government, following the model set by TSMC.

Singapore is also actively strengthening its semiconductor industry chain. Per official Singaporean data, out of the 15 world-class chip design companies, 9 have established bases in Singapore. Additionally, there are 14 semiconductor fabs and 20 semiconductor assembly and testing facilities.

Coupled with the nearby established backend testing clusters in Malaysia, if Singapore constructs a more complete industry chain, it is poised to attract even more world-class testing and packaging companies to establish their presence there.

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