ANNOUNCEMENT “Penang Unveils Plans for Its IC Design and Digital Park”
SPEECH BY YAB TUAN CHOW KON YEOW, CHIEF MINISTER OF PENANG FOR ANNOUNCEMENT
“Penang Unveils Plans for Its IC Design and Digital Park”
4 May 2024 (SATURDAY) | 10.00AM
Penang Development Corporation
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[SALUTATION]
Distinguished guests,
Members of the media,
Good morning to you all,
It is with great pride and enthusiasm to unveil the Penang State Government’s plan for its IC Design and Digital Park here this morning.
This ambitious plan is set to attract and house high-impact projects including IC Design, R&D, Global Business Services (GBS), digital technologies investments, and a circular digital economy ecosystem, which underscores Penang's commitment to fostering innovation, driving growth in key industries as well as attracting top-tier talent to serve in the State.
The first phase of this project involves construction of two pioneering office buildings, namely GBS By The Sea and GBS TechSpace with a total cost of RM347 million. The construction is ongoing and the structures are scheduled to be completed by the fourth quarter of this year, which will then provide approximately 350,000 square feet of premium office space. Furthermore, these new offices will be equipped with high-spec building features, cutting-edge engineering lab facilities, and parking accommodations for up to 1,000 vehicles.
The second phase of this development consists of an additional building named GBS@Technoplex with a total cost of approximately RM308 million, and will provide an additional 500,000 square feet by 2027.
On top of that, the Penang state government is also currently formulating an incentive package to offer companies/strategic investors interested in further enhancing and complementing the park. Such incentives are set to bolster our existing business ecosystem as well as investment attractiveness within and beyond the nation. Moreover, the plans are in progress to also enhance the park with modern amenities featuring safe pedestrian-friendly walkways, bicycle lanes, park-and-ride facilities, dedicated spaces for outdoor recreational activities, and a local eatery. These enhancements, coupled with the introduction of shared micromobility services like electric bicycles and scooters, aim to enhance connectivity and facilitate access to public amenities within the development area.
All in all, these developments will offer a total of 1 million square feet of premium office space including the existing Innoplex building within the area, to house impactful projects and in turn solidifying Penang’s position as the preferred choice of investment destination for businesses and entrepreneurs within these sectors.
Iconically, the current area hosts leading GBS and IC design industrial players, including Intel, Motorola, AMD, Microchip, UST Global, Siemens, and Zebra to name a few. Additionally, four more prominent global investors are set to be announced soon.
Ladies and gentlemen,
Manufacturing and services sectors remain Penang’s twin engines of growth. Penang’s gross domestic product (GDP) recorded the fastest growth among all states in 2022, with a 13% year-on-year increase to RM112 billion. Particularly, manufacturing and services sectors collectively contributed 95% of the state’s total.
While manufacturing continues to dominate the state’s investment performance, we are seeing an increasing momentum from the digital economy industries, in particular the IC Design, R&D and GBS. Over the past five years (2019 – 2023), Penang has garnered nearly RM20 billion of approved investments in the services sector, accounting for 9% of the state’s total approved investments in the said years.
To date, Penang houses more than 200 Malaysia Digital status companies. Notably, we are seeing the emergence of third-party service providers, which include IC design and knowledge-based solutions providers, on top of the captive players in Penang.
Over the past 30 years, Penang has been home to over 20 companies specializing in IC design, boasting a formidable presence from global players, such as Infineon, Lattice, Synopsys, Efinix. Nevertheless, Penang also hosts several homegrown IC design corporations, such as Oppstar Technology, SkyeChip, and Infinecs Systems, among others.
In the past, the Penang State Government has always been at the forefront of the digital economy sector through the establishment of a series of GBS Nodes, which is the first of its kind in the nation. Particularly, the transformation of GBS@Mayang from the former Mayang Mall, coupled with the development of GBS@Mahsuri underscores Penang’s commitment to fostering a thriving ecosystem for digital innovation. These buildings also house IC Design companies such as StarFive, Bitsilica, Synapse Design, to name a few.
Although Penang’s IC design companies are not clustered in the same area, we have been developing our own GBS Nodes within the Bayan Baru and Bayan Lepas area since 2010.
Ladies and Gentlemen,
With the digital economy expected to contribute 25.5% of the country’s GDP and create over 500,000 jobs by 2025, Penang is well-poised to play a prominent role in the national digitisation agenda, made possible by manufacturing excellence, innovation, and talent pool availability.
Banking on the five decades of industrial excellence, Penang is making steady progress in cementing its position as the “Silicon Valley of the East”. As more businesses respond to the changing global situation, it is important that Penang continues to provide services that elevate us up the value chain.
To further promote IC design, the State is offering a subsided rental rate for office space. In addition, we will be applying to the Federal Government to obtain the incentive/grant to strengthen the ecosystem. As such, these will also be included in the incentive package that will be announced subsequently.
Nevertheless, our talent remains one of the key differentiators for Penang, along with the future-proof infrastructure and robust industrial network. With the top universities in the northern region specializing in nurturing E&E and semicon graduates, namely Universiti Sains Malaysia (USM), Universiti Teknologi Mara (UiTM) and Universiti Malaysia Perlis (UniMAP) and together with the State’s initiatives to attract talents to Penang, we continue to strengthen our position and relevance as a location for global businesses to set up their offices here.
With the 1 million square feet of premium office space backed by the State Government, poised to be the largest in the nation, we commit to continue delivering exceptional infrastructure, conducive facilities, and attractive amenities to anchor Penang’s pioneer position in the IC design and digital industries. Hence, I would like to take this opportunity to thank InvestPenang and the Penang Development Corporation (PDC) for their instrumental role in spearheading this development.
My best wishes to all. Thank you very much.