KUALA LUMPUR (Jan 24): Malaysia’s largest semiconductor wafer foundry SilTerra Malaysia Sdn Bhd is investing RM645 million on an expansion plan to boost its annual capacity by 20%.

In a statement Monday, the firm said the investment will increase SilTerra’s annual capacity from 8.3 million as at end of July 2021 to 10 million mask layers.

Meanwhile, it said the additional capacity is expected to be ready for production by early 2023.

SilTerra is a strategic investment of Dagang NeXchange Bhd (DNeX), and Beijing Integrated Circuit Advanced Manufacturing and High-End Equity Investment Fund Center (Limited Partnership) (CGP Fund).

DNeX group managing director and SilTerra executive chairman Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the investment is the shareholders’ ongoing commitment to equip the company with best-in-class manufacturing capabilities and expand the production capacity to achieve a better economy of scale, with lower manufacturing cost.

“The initiatives implemented thus far to transform SilTerra into a profitable and resilient technology company have yielded fruitful results.

“In the past six months, our debottlenecking and process improvements exercise have resulted in improved productivity and efficiency levels,” he said.

Syed Zainal said SilTerra is now a profitable entity and is well-poised to grow further in view of the continuous strong demand for semiconductors and prevailing capacity constraints within the industry due to the high demand of electric vehicles, Internet-of-things (IoT), data centres and electronic commerce.

“This demand is particularly relevant especially for the 200mm specialty foundries where SilTerra is in.

“Hence, it is prudent for us to continue our long-term investment programmes for SilTerra to cater to the rising demand,” he said.

He said the recently inked long-term agreements (LTAs) with ChipOne Technology (Beijing) Co Ltd and Taiwan-based ILI Technology Corp will provide a stable business for SilTerra in case a market downturn happens.

“Apart from the business these LTAs will bring, SilTerra is committed to work with our customers to improve the technology cooperation to further strengthen and optimise the product and technology roadmap among the parties,” he said.