The Penang state government and Gamuda Bhd. announced the launch of a 2,300‑acre island off Penang’s coast on June 20, 2024, marking the start of a 30‑year plan to turn reclaimed sea into a semiconductor hub. The island, dubbed Silicon Island, will sit south of the historic trading port and will be finished by 2034.
Penang has long been a semiconductor nucleus, housing Intel, AMD, and ASE, and contributing roughly 5% of the world’s chip exports. Yet the state’s land is running out; the 1970s boom of factories around Bayan Lepas has left little room for new plants. Chief Minister Chow Kon Yeow said the island will free up space for higher‑value activities such as design and advanced packaging.
A Deloitte‑backed study estimates the island could add 1.1 trillion ringgit to Malaysia’s GDP by 2050, drawing 75 billion ringgit in investment and creating 220,000 jobs. The project also aims to keep the region competitive as AI demand pushes supply chains into Southeast Asia.
Interest from Taiwan and Japan is already palpable. Tan Jun Jing, deputy project director, noted that a senior Japanese executive has visited three times in two months, underscoring the urgency of capacity expansion. Construction crews now escort orange pipes and fill trucks across the newly reclaimed sand.
The first phase will see office towers, hotels, and waterfront apartments rise before the semiconductor plants. By 2026, the island will host the first cluster of design labs, with full production slated for 2030.
The government will announce the exact timeline for the next funding round in September, after the first investment tranche of 15 billion ringgit has been secured.