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Wednesday 04 February 2026 22:58:55 GMT
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While much has been said about advanced packaging in the context of Malaysia’s semiconductor sector, little is really known about what it entails.  The rhetoric is that since Malaysia has a strong and world-renowned base for test assembly and packing of semiconductor chips which dates back to the 1970s, it should be a shoe-in for these same Malaysian companies to get into advanced packing.  The Malaysian government is making a push to move its semiconductor industry into advanced packaging, which is a business estimated to be worth nearly US$60bil now and more than US$100bil in the future. In a nutshell, advanced packaging is about integrating multiple chips — such as processors, memory and specialised AI accelerators — into a single package. It is an innovation led by wafer fabrication giants, who figured that instead of trying to put even more functions into one chip, which has its limitations, they came up with the idea of stacking the chips up or placing them closer together.  The trick then lies in how these multiple chips are then put into one single package, hence the term advanced packaging.  This is unlike traditional packaging which mainly just encloses a single chip in a protective casing and connects it to the circuit board.  Advanced packaging is where the package itself is a critical determinant of performance, power efficiency and heat management.  But can Malaysia’s outsourced semiconductor assembly and test (OSAT) players easily venture into advanced packaging? OSAT players feature significantly among Malaysia's listed semiconductor stocks. Companies such as Inari Amertron Bhd, Malaysian Pacific Industries Bhd (MPI), Unisem M Bhd and Globetronics Technology Bhd, for example have a combined market capitalisation of a whopping RM27.08bil.  The problem is, basic OSAT work is increasingly being undertaken by competitors in countries like Vietnam and China as this work becomes increasingly commoditised.  Full story in our StarBiz 7 copy. #starbiz
While much has been said about advanced packaging in the context of Malaysia’s semiconductor sector, little is really known about what it entails. The rhetoric is that since Malaysia has a strong and world-renowned base for test assembly and packing of semiconductor chips which dates back to the 1970s, it should be a shoe-in for these same Malaysian companies to get into advanced packing. The Malaysian government is making a push to move its semiconductor industry into advanced packaging, which is a business estimated to be worth nearly US$60bil now and more than US$100bil in the future. In a nutshell, advanced packaging is about integrating multiple chips — such as processors, memory and specialised AI accelerators — into a single package. It is an innovation led by wafer fabrication giants, who figured that instead of trying to put even more functions into one chip, which has its limitations, they came up with the idea of stacking the chips up or placing them closer together. The trick then lies in how these multiple chips are then put into one single package, hence the term advanced packaging. This is unlike traditional packaging which mainly just encloses a single chip in a protective casing and connects it to the circuit board. Advanced packaging is where the package itself is a critical determinant of performance, power efficiency and heat management. But can Malaysia’s outsourced semiconductor assembly and test (OSAT) players easily venture into advanced packaging? OSAT players feature significantly among Malaysia's listed semiconductor stocks. Companies such as Inari Amertron Bhd, Malaysian Pacific Industries Bhd (MPI), Unisem M Bhd and Globetronics Technology Bhd, for example have a combined market capitalisation of a whopping RM27.08bil. The problem is, basic OSAT work is increasingly being undertaken by competitors in countries like Vietnam and China as this work becomes increasingly commoditised. Full story in our StarBiz 7 copy. #starbiz

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