KUALA LUMPUR (Oct 9): Unisem (M) Bhd (KL:UNISEM) and its subsidiary plans to invest RM396 million to expand its semiconductor manufacturing plant in Gopeng, Perak, as the group seeks to capture growing demand for advanced chip packaging used in artificial intelligence (AI) and data centres.

The semiconductor assembly and test services provider said the second phase of expansion will increase its manufacturing capacity for wafer bumping and post-bump services, which are used in preparing semiconductor chips for advanced packaging.

In a filing with Bursa Malaysia on Friday, Unisem said the expansion involves constructing a new production facility with a built-up area of approximately 40,000 sq m, at an estimated cost of RM196 million.

Half of the facility will be leased to its wholly owned subsidiary, Unisem Advanced Technologies Sdn Bhd, to expand wafer-bumping operations, an advanced semiconductor packaging process.

The necessary equipment and facility preparation works are expected to cost another RM200 million, bringing the total investment to RM396 million.

Unisem said the expansion is aimed at meeting growing customer demand, particularly for advanced packaging applications in AI, data centres and high-performance computing.

The project will be funded through a combination of internally generated funds and bank borrowings, although the proportions have yet to be determined.

The group said the expansion is not expected to materially affect its earnings for the current financial year but should contribute positively once completed and operational.

The latest expansion follows Unisem's earlier investment in its Gopeng facility, which began construction in March 2022. The first phase was initially estimated to cost RM300 million and was designed to double the production capacity of its existing operations in Ipoh.

In April this year, Unisem chairman and group managing director John Chia Sin Tet told The Edge that the group had invested RM600 million in its Gopeng plant as part of nearly RM1 billion in capital expenditure over three years.

More recently, CIMB Securities said in a September research note that Gopeng Phase 2 could drive Unisem's next leg of growth, with the expansion expected to support additional wafer-bumping and advanced packaging capacity.

At the midday break on Friday, Unisem shares were up eight sen or 1.9% at RM4.36, giving the group a market capitalisation of RM7.48 billion.