The Penang State Government has on last Friday officially launched the Penang Automation, Test and Equipment (ATE) Campus, a strategic initiative aimed at positioning the ATE sector as the next engine for Malaysia’s industrial transformation.

The initiative is designed to accelerate the co‑development, qualification, and scaling of Malaysian ATE solutions by enabling first-customer deployment through structured collaboration between local companies and global manufacturers, within a trusted and standards-driven ecosystem that reduces deployment risk and supports adoption in real production environments, InvestPenang said in a statement.

Spearheaded by InvestPenang, the initiative will be implemented in two phases. Phase One focuses on building collaborative industry platforms — such as field labs, training platforms and localization pathways—aligned with real production requirements.

Meanwhile, Phase Two will explore the development of a dedicated physical campus inspired by the Brainport Industries Campus, bringing together qualified suppliers under shared production and qualification standards to form an integrated manufacturing ecosystem that global companies can engage with confidently.

“By strengthening collaboration and building deeper local capabilities, we believe Penang can continue to play a leading role in shaping the future of advanced manufacturing in the region,” the Chief Minister of Penang Chow Kon Yeow said.

To support the initiative, the Penang State Government has committed 10 acres of land valued at approximately MYR 40 million ($10.12) through the Penang Development Corporation, as announced in March 2026.

Further funding support is being explored in collaboration with the Federal Government to accelerate the development of key enablers, particularly training programs and shared laboratory facilities under the Penang ATE Campus.

The launch also marks the start of localization pathways for the participating multinational corporations (MNCs).

A total of 11 memorandums of understanding (MoUs) signed between MNCs and InvestPenang were recognized to facilitate pilot projects and localization opportunities.

The involved MNCs are ams OSRAM, AT&S, B. Braun, TF-AMD Penang, Intel Malaysia, Keysight, Renesas, Sandisk, Smith & Nephew, Texchem and Waferwise.

The Penang ATE Capability Map was also unveiled, highlighting local capabilities across semiconductor front-end, advanced packaging, conventional packaging, electronics manufacturing services (EMS) and original design manufacturers (ODM), and MedTech sectors.

The capability map supports localization efforts in line with the Malaysian Investment Development Authority’s (MIDA) New Incentive Framework.

In conjunction with the launch, InvestPenang also presented the ATE Policy Recommendation White Paper to the Ministry of Investment, Trade and Industry (MITI), outlining policy recommendations to further strengthen Malaysia’s ATE ecosystem and global competitiveness.

It is noted that over the past five decades, Malaysia has built a strong reputation as a trusted partner in the global semiconductor industry, particularly in assembly, testing and packaging (ATP) activities, contributing approximately 13 percent in the global ATP market.

In 2025, Malaysia also recorded MYR 78 billion ($19.73 billion) in exports of machinery, equipment and parts, reflecting a 13.5 percent year-on-year increase and highlighting the growing demand for advanced manufacturing solutions.

Penang plays a central role in this ecosystem, hosting the highest concentration of ATE companies and its ecosystem partners in Malaysia that enable ATP activities.

The industry cluster is supported by more than 100 automation machinery, precision engineering and component companies, said the statement.

Among the ATE companies and its ecosystem partners in Penang, 19 of them are listed in Bursa Malaysia, with a combined market capitalization of approximately MYR 27 billion ($6.83 billion) as of April 2026 and aggregated annual revenue of nearly MYR 5 billion ($1.27 billion).

Four of these local companies have surpassed MYR 500 million ($126.5 million) in annual revenue, signaling progress towards the aspirations of Malaysia’s National Semiconductor Strategy to develop “10+100 local champions.”

Between 2020 and 2025, Penang recorded MYR 25 billion ($6.33 billion) in approved manufacturing investments in the machinery and equipment sector, representing 40 percent of Malaysia’s total investments in this segment and reinforcing the state’s importance in the global manufacturing value chain.

The Penang ATE Campus represents a significant step toward strengthening Malaysia’s ATE ecosystem, said the statement.

By strengthening collaboration between MNCs and local industry players, the initiative will accelerate capability development, enable technology transfer and unlock new growth opportunities for Malaysian firms.

While the initial focus is on semiconductors, the model is designed to scale across sectors such as MedTech, AgriTech, defense and advanced industries, as Penang continues to co-engineer the future of advanced manufacturing and positioning ATE as a key enabler of Malaysia’s broader industrial transformation, according to the statement.

Penang allocates 10 acres of industrial land for the establishment of Penang ATE Campus