GEORGE TOWN: The closure of Fairchild Semiconductor Malaysia in Penang will not place a damper on the state’s economic growth due to the dynamism of the electronics industry, said investPenang director Datuk Lee Kah Choon.

In fact, the competition in the semiconductor or electronics industry remains great, Lee told The Edge Financial Daily.

Lee was confident that Penang would sail through the current slowdown in the global electrical and electronics industry (E&E) because it has always been an investment choice for industry players.

“The [slowdown] of the semiconductor industry is cyclical. The outlook for the E&E industry is good, as witnessed by new additions of investments here,” said Lee, who is also special adviser to Chief Minister Lim Guan Eng.

In an earlier press conference yesterday, Guan Eng concurred with Lee on Penang’s sustainability in the present E&E market scenario as the industry recorded a healthy 10% growth in exports for the first half of the year in Penang.

“We would not face a problem because of the healthy nature of the industry,” he said, adding that the closure is not a Penang problem but a company-specific one.

US chipmaker Fairchild is not only closing its facility in Penang, but also in West Jordan, Utah in the US, as well as its five-inch wafer fabrication lines in Buncheon, South Korea, which will reportedly save the company US$45 million (RM141.75 mllion) to US$55 million a year.

In Penang, Fairchild is expected to lay off about 1,250 local workers when it shuts down its facility next year.

“We will ensure that Fairchild applies employment laws. investPenang is in constant contact with Fairchild to offer job placement options for affected staff, including job counselling and other assistance.

“We, however, take heart that through new investments into Penang, as well as expansion and reinvestment by existing investors, the job market in the state remains positive,” said Lee.

He added that as at July 31, there were still 11,759 jobs available in Penang.

Lee said the state will continue to attract multinational corporations (MNCs) to invest here and assist small and medium enterprises (SMEs) and local vendors that would be affected by the disruption in Fairchild’s supply chain.

“Already two big MNCs (SanDisk Corp and Haemonetics Corp) are in the process of completing their facilities in Batu Kawan Industrial Park.

“Seagate [Industries (M) Sdn Bhd] has also recently informed [us] that they will be building their multimillion ringgit facility in the same park,” he said.


This article first appeared in The Edge Financial Daily, on August 28, 2014.