X-FAB: RM500 million to expand Sarawak foundry

KUALA LUMPUR: X-FAB Silicon Foundries NV is planning to invest RM500 million (US$116 million) between 2015 and 2017 to expand the production capacity and capabilities of its foundry operation in Kuching, X-Fab Sarawak Sdn Bhd.
X-FAB is the world’s leading analog/mixed-signal and micro-electro-mechanical systems (MEMS) foundry group manufacturing silicon wafers for automotive, industrial, consumer, medical and other applications.
“Our total investment (for X-FAB Sarawak) from 2006 until today including 2017 will be about US$180 million,” its CEO Rudi De Winter told reporters after announcing the group’s expansion plan here yesterday.
He said the group aims to increase its production capacity to 27,000-28,000 wafers per month from 24,000 wafers currently.
He said the investment would include a capital expenditure amounting to RM125 million in the current year, adding some of the investments would also be utilised for tools upgrading.
From 2016 onwards, De Winter said he expects the group’s operation in Sarawak to represent more than 50% of its revenue.
“Last year, its contribution was still less than 50%,” he said, adding that the group recorded total revenue of US$330 million in 2014.
“I believe around US$125 million (from the revenue) was from X-FAB Sarawak,” he added.
Besides Sarawak, X-FAB Silicon Foundries owns wafer production facilities in Germany and the US, with over 2,500 employees worldwide.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed, who attended the briefing, said the group’s operation in Sarawak has been driving the growth of local economy, with employment of more than 1,000 staff, where more than 80% of them are considered to be high income earners.
“We believe that this expansion will act as a catalyst in attracting other high technology firms to establish their operations in Malaysia as they will be able to leverage on the wafer fabrication services provided by X-FAB,” he added.
X-FAB is majority owned by Xtrion NV a holding company based in Tessenderlo, Belgium (61%), while 36% is owned by Sarawak.