Germany-based AIXTRON, a supplier of deposition equipment for compound semiconductors, is set to spend €40 million ($46 million) in building a new manufacturing facility in Malaysia, according to a release on Wednesday of the firm.

The move aims to tap into the fast growing semiconductor equipment ecosystem in South East Asia, AIXTRON highlighted.

The new facility will include assembly & test, engineering support and local purchasing capabilities. AIXTRON plans to manufacture some of its 100/150/200 mm products in the new factory in the Penang region, mostly to address customers in Asia.

The capital expenditure (capex) of €40 million is allocated for the second half of 2026 and first half of 2027. The plant is expected to start operation in the spring of 2027 with first shipments expected in the second half of 2027.

Felix Grawert, CEO of AIXTRON, emphasized the Malaysia factory complements the strengths of the existing locations in Germany and the United Kingdom and gain advantages by adding access to the South East Asia supply chain. No personnel reduction is planned in Europe as a result of the expansion to Malaysia, the executive added.

RHB sees global semiconductor recovery, robust AI-related demand to support Malaysia’s tech sector