• Intel Malaysia expands Penang advanced packaging for AI chips.
• Intel Malaysia needs more semiconductor and AI talent.

Intel is expanding its advanced packaging capabilities in Malaysia as AI processors become larger and more complex, increasing the manufacturing demands involved in combining multiple chiplets into complete systems.

In an exclusive interview with Tech Wire Asia, Lee Wei Chern, Vice President, Intel Foundry; General Manager, Intel Assembly Test Manufacturing; and Managing Director, Intel Malaysia, said advanced packaging is becoming increasingly important as chipmakers move towards more complex system designs.

“Advanced packaging has become a critical differentiator in the AI era,” Lee said. “As AI systems scale, the challenge is no longer just about producing individual chiplets but integrating them into complete systems that deliver the bandwidth, power efficiency and reliability that customers expect.”

Packaging more complex AI chips

As AI chip packages grow larger and combine chiplets made using different process technologies, assembly and test operations have to manage multiple manufacturing challenges within the same system.

Lee said Intel is working on technologies including EMIB-T, glass substrates and manufacturing processes designed to support larger form factors and higher performance.

“There is no single challenge when scaling to larger and more complex heterogeneous integration packages,” Lee said. “Thermal management, yield, interconnect and power delivery, and architecture co-design are all critical areas we focus on to ensure we deliver products with the right quality and reliability.”

Advanced packaging is also becoming an entry point for some customers working with Intel Foundry. Lee said customers are evaluating packaging technologies that allow chiplets made using different process technologies to be integrated into complete systems.

“Advanced packaging is increasingly becoming a strategic entry point for customers,” Lee said. “It creates opportunities to deepen relationships and support a broader range of foundry requirements as customers move toward more complex, system-level designs.”

Assembly Test Manufacturing remains part of that process, handling the manufacturing steps needed to deliver the final packaged product.

Penang expands its manufacturing role

Intel’s new advanced packaging facility in Penang, scheduled to begin operations this year, will expand the company’s manufacturing capabilities in Malaysia.

Intel has operated in Malaysia for more than five decades, with the country serving as one of its assembly, test and manufacturing locations. The Penang expansion adds advanced packaging to those existing capabilities.

“The new Penang facility represents the next phase of that journey,” Lee said. “It expands our capabilities across advanced packaging, assembly, test, research and design.”

According to Lee, the facility will support end-to-end advanced packaging manufacturing. Wafers produced at multiple fabrication plants will be brought into the facility before finished products are shipped out.

The expansion will also allow Intel Malaysia to handle more advanced products and technically complex manufacturing workloads alongside its existing operations.

“It positions Intel Malaysia to support more advanced products and increasingly sophisticated manufacturing workloads,” Lee said.

Malaysia has spent decades building its semiconductor manufacturing base around areas including assembly and testing. The country is also seeking to develop more capabilities in areas such as advanced packaging and chip design.

Lee said the country already has manufacturing experience and an established semiconductor ecosystem, but further development is needed in engineering and research capabilities.

“The next step is building deeper capabilities in talent, research and innovation, particularly in advanced packaging, design enablement, automation, materials science and manufacturing analytics,” Lee said.

Semiconductor talent requirements are changing

The skills required by Intel’s manufacturing operations are also changing as semiconductor production incorporates more automation, data analysis and advanced engineering.

Lee said Intel increasingly requires workers who can combine semiconductor knowledge with expertise from other technical disciplines.

Key areas include integrated circuit design and validation, advanced packaging process development, systems engineering, test engineering and reliability. Intel is also seeking capabilities in data analytics, machine learning, AI software, cybersecurity, robotics and manufacturing automation.

“The hardest skills to find are often at the intersections — engineers who can connect semiconductor domain knowledge with data science, statistics and AI to improve areas such as yield analysis, predictive maintenance and supply-chain optimisation,” Lee said.

Addressing those gaps requires greater exposure to areas including semiconductor device physics, design for manufacturability, packaging, testing and validation, according to Lee.

Intel works with Malaysian universities including Universiti Sains Malaysia and Universiti Malaysia Perlis on areas such as advanced packaging research and curriculum development. The company has also expanded partnerships with Tunku Abdul Rahman University of Management and Technology and Multimedia University around AI skills.

“Courses, internships, cooperative education programmes and joint laboratories can give students earlier exposure to real tools, datasets and workflows,” Lee said.

Malaysia’s place in a diversified supply chain

Intel’s manufacturing network also operates against a backdrop of export controls, geopolitical tensions and semiconductor companies diversifying production across multiple locations.

Lee said semiconductor supply-chain resilience requires companies to balance efficiency with stability and flexibility across their manufacturing networks.

“A resilient semiconductor supply chain balances efficiency with stability and flexibility,” Lee said. “It is geographically diversified, transparent and able to respond quickly to changing conditions.”

He said trust within the semiconductor supply chain depends on consistent quality, security, traceability and manufacturing integrity throughout the product lifecycle.

Lee said Malaysia’s established semiconductor ecosystem, workforce and integration into global supply chains give the country a role within a geographically diversified manufacturing network.

Looking ahead, Lee said Intel Malaysia’s progress should be assessed by the capabilities and responsibilities it develops within the company’s global operations rather than investment or employment figures alone.

“I would like to see Malaysia recognised as a centre of excellence for advanced packaging, manufacturing innovation, automation and engineering leadership,” Lee said. “That means developing world-class talent, deploying next-generation manufacturing technologies and taking on increasingly critical global responsibilities.”

Lee also pointed to collaboration with universities, suppliers, startups and other industry participants as part of that development.

“If Malaysia becomes a place where advanced technologies are developed, industrialised and scaled for the world, that would mark a successful next chapter not only for Intel Malaysia, but for Malaysia’s role in the global semiconductor ecosystem,” Lee said.

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