Intel in Malaysia for the long haul

By B.K. SIDHU
bksidhu@thestar.com.my

MD: The chipmaker only moving a unit back to US, not shutting any plants

KUALA LUMPUR: Intel, world’s largest chipmaker, is committed to remain in Malaysia even though the rationalisation of its operations will lead to the moving of its assembly and test development (ATD) unit back to Arizona in the United States.

“The wafer fabrication and assembly lines must be close to each other, as there is a need for a lot of interaction because we need to respond to market trends and consumers fairly quickly,” Intel Malaysia managing director Atul Bhargava said.

“Being in different time zones (makes it difficult and that is why) we are moving the unit back to the US. Intel continually optimises its resourcing and business model in line with evolving business needs,’’ he said.

The migration will begin in the first quarter of 2011 and be completed by June the same year.

Atul Bhargava … ‘Our investment in Malaysia is growing every year.’

 

The affected workers, about 500 of them, at the plant in Kulim Hi-Tech Park will be absorbed into the group and redeployed for other job functions at the Kulim and Penang facilities.

“So we are not shutting down any plants. It is just that the ATD development needs to be closer home in the US,” he added.

Intel has been in Malaysia since 1972. It is the largest offshore facility outside the United States for the chipmaker. The company has so far invested US$3.9bil (RM13bil) in Malaysia.

Intel Malaysia comprises three campuses and employs more than 10,000 people.

Intel Penang is a key assembly and testing site, Intel Kulim assembles processor packaging and is an important operations centre for mobile modules, and Intel Kuala Lumpur includes a multimedia super-corridor development centre as well as a sales and marketing office.

Of the 10,000 people employed, 55% are involved in the manufacturing division, 25% in the design of products, and the balance 20% are in services (IT, shared and other service-related areas).

“We are fairly big in doing design work here and our plants are high-tech, so we really need knowledge workers as the job is not about pushing of buttons,’’ Atul said.

As Malaysia marches towards becoming a knowledge-based and innovation nation, it is necessary to have a workforce that is able to work towards achieving that goal.

“If there is one thing I could tell Prime Minister Datuk Seri Najib Tun Razak, it is that the need to change the human capital (development in the country),’’ Atul said.

He said improvements were needed in the systems adopted by local universities and they should strive to become the world’s Top 100.

They need to change the curriculum to be industry friendly and adopt newer methods of teaching. Only then can talent that can help the country in the innovation phase be created.

“I have been advocating the need to do it either organically or hook up with institutes like MIT; make that quantum leap, emulate, so that people will know us,’’ he said. (MIT refers to the Massachusetts Institute of Technology in the United States.)

Asked whether Intel would follow Western Digital and invest more to expand its operations in the country, Atul said: “Our investment in Malaysia is growing every year as we are here for the long haul.

“We have worked hard and diversified, we have the latest technology here, and we are committed to stay. But just like other companies we move around for the needs of our customers.”

(Western Digital recently announced it would invest about US$1.2bil in Penang.)

Atul said in whatever Intel did, it made sure there is benefit to the company, the country and the consumer.
 
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