Speech by Chief Minister of Penang
The Opening Ceremony of Broadcom Global Distribution Warehouse
Batu Kawan Industrial Park, Penang
19 September 2017
American Companies Are Still Investing In Penang
Yang Berhormat Dato' Sri Mustapa Mohamed, Minister of International Trade and Industry
Dato' Azman Mahmud, Chief Executive Officer of MIDA
Dato' BC Ooi, Senior Vice President, Global Operations, Broadcom Limited
Dato’ Rosli , General Manager of PDC
Dato’ Loo Lee Lian, CEO of Invest Penang
Ladies and Gentlemen,
Good morning. I am pleased to be present today at the opening ceremony of Broadcom Global Distribution Warehouse at Batu Kawan Industrial Park. This Foreign Direct Investment (FDI) by this top American developer and global supplier of products based on analog and digital semiconductor technologies, marks the continued growth of investments into Penang.
Penang - E&E Sector Growth and Hub of Global Distribution
The World Semiconductor Trade Statistics (WSTS) has projected that the global semiconductor sales will increase by 11.5% to reach USD377.8 billion this year, and the Asia Pacific region will experience the highest growth of 12.4%. Out of the RM59 billion approved investment recorded from 2008-2016, RM14 billion or 24% were from US investors, which makes US the largest FDI contributor to the Penang economy.
Penang is strategically located, with good connectivity a well-developed cargo distribution network supported by the Penang International Airport for air cargo and the Penang Port for sea freight. Batu Kawan is also strategically connected to the major highways such as the North South Expressway for land cargo transport.
The value of exports for Penang in Q1 2017 is RM52.9 billion an increase of 22% y-o-y compared to RM43.5 billion in Q1 2016. Penang’s export contribution to the total national export is 23.5%. This achievement in our exports to global markets is supported via the distribution, logistics and warehousing facilities in Penang.
Re-investment of Broadcom Global Distribution Hub in Penang
I am pleased that Broadcom will be relocating their two offshore warehouses into Batu Kawan Industrial Park and making this facility into their annual Global Distribution Warehouse, which is expected to manage an shipment of 4 billion units, directly supporting Broadcom Limited’s RM64 billion revenue. Broadcom Limited's market capitalization is now #2, in the semiconductor industry (exclude memory manufacturers), valued at USD 97billion or RM445billion. The investments into this facility, excluding freight expenses, is valued at RM59 million.
Broadcom and Penang have grown together through the years. The company has deep roots in Penang starting from 1972 where they first set-up their operation in Penang as part of Hewlett Packard, located in Bayan Lepas Free Industrial Zone.
Clearly American companies are still investing in Penang. Other than the RM14 billion investments made by American companies from 2008-2016 mentioned earlier, I wish to add that this year itself American companies such as Boston Scientific has injected “hundreds of millions of Ringgit” and UST Global has announced the expansion of their new Bayan Lepas facility with a proposed headcount of 2,000 in Penang by 2020.
We also wish to thank the Minister of International Trade & Industry for the support given. The State government is of course supportive of Broadcom’s Global Operations consolidation and strategic synergy focused on R&D, Product engineering and Global supply chain.
As of July 2017, Broadcom Penang has 500 employees to support various positions mainly upper and middle management, planners, finance, product engineering, development and testing. Through the years, talents in Penang have been nurtured and given development opportunities to grow by Broadcom and the fruits of these efforts can be seen by the many global industry leaders from Penang.
Dato’ Tan Hock E, the Chief Executive Officer, President and Executive Director of Broadcom Limited is one such exemplary leader from Penang. Dato’ Tan is a well-known corporate figure instrumental in the successful M&A of Avago and Broadcom. He previously captained MNCs such as IDT and Integrated Circuit Systems.
Another Penang ‘lang’ is Dato’ BC Ooi, the Senior Vice President, Global Operations at Broadcom, responsible for managing worldwide manufacturing, outsourcing, procurement and logistics, planning and quality programs.
Companies based in Penang are also beneficiaries to Broadcom’s growth. According to Broadcom, some of their direct local partners in Penang includes Inari Technology, TF-AMD Microelectronics, ASE Electronics, Aemulus, National Instruments, Xcerra, Exis Tech, Experior Technology, Tessolve. Their outsource partners also engage with companies such as Vitrox and MI Equipments. This again shows the dynamic ecosystem and supply chain in Penang, reflected in our tagline ‘Powered in Penang’.
Broadcom’s Batu Kawan Global Distribution Warehouse will spur significant supply chain spin-offs in Penang and northern area of Malaysia. With Broadcom’s investment in this new global distribution centre, over 300 additional direct job opportunities will be created in Penang. Local freight and transportation activities will increase.
The State also wishes to acknowledge Broadcom’s important contribution to the public-private-people STEM initiatives in Penang, where the company has contributed to the Penang Science Cluster and the Penang International Science Fair, which is the largest science fair in Malaysia. This opening ceremony today further strengthens Penang as an established destination of choice for global investors.
I wish to once again congratulate Broadcom on the completion of this facility. As always, you can count on the State and Federal Government through agencies such as the Malaysian Investment Development Authority (MIDA), InvestPenang and Penang Development Corporation to continue to facilitate and provide assistance whenever required.