Kinsus, a subsidiary of iPhone assembler Pegatron, previously rented a plant in partnership with a local manufacturer and planned to later build a facility on its own, Nikkei Asia first reported. However, that plan was put on hold due to mounting geopolitical uncertainties and slow demand in the automotive, consumer electronics, and memory chip sector, the people said.
"Kinsus had plans, but the risk is too high for overseas expansion at this moment," a senior source with direct knowledge of the company told Nikkei Asia. "Staying put is a better strategy than making a move."
"Following U.S. President Trump's return to office and the threats of tariffs ... that all created a lot of uncertainties," an executive based in Penang told Nikkei Asia. "Many investment attempts cooled down and decisions went into 'wait and see' mode, rather than rushing to boost capacity immediately."
Two executives with different electronic component suppliers to AWS, Google and AliCloud said that while Malaysia's semiconductor sector had cooled, the data center supply chain is still expanding rapidly due to robust demand for data centers in Southeast Asia.
"Server supply chains, including assembly production by Supermicro and Wiwynn in Johor, are still feverishly expanding in Malaysia," one of the two executives, who has been in Penang for more than five years, told Nikkei Asia, citing his company's involvement in the moves. Another executive said his company is building two new plants in the country to support AWS, AliCloud and ByteDance's data center demand.
Brady Wang, an analyst with Counterpoint Research, told Nikkei Asia that the recovery for automotive and industrial applications remains very slow…Read More
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Counterpoint Research is a global industry and market research firm providing market data, intelligence, thought leadership and consulting across the technology ecosystem. We advise a diverse range of global clients spanning the supply chain – from chipmakers, component suppliers, manufacturers and software and application developers to service providers, channel players and investors. Our veteran team of analysts serve these clients through our offices located across the key innovation hubs, manufacturing clusters and commercial centers globally. Our analysts consistently engage with C-suite through to strategy, market intelligence, supply chain, R&D, product management, marketing, sales and others across the organization. Counterpoint’s key coverage areas: AI, Automotive, Cloud, Connectivity, Consumer Electronics, Displays, eSIM, IoT, Location Platforms, Macroeconomics, Manufacturing, Networks & Infra, Semiconductors, Smartphones and Wearables.
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