In conversation with: Invest Penang CEO Datuk Loo Lee Lian

This article first appeared in the Industrial Special Report in November 2025.

1. Penang’s E&E sector continues to dominate Malaysia’s FDI. Do you have statistics of the category, and what percentage of total manufacturing investment in 2024–2025 came from semiconductors? How is that concentration risk being managed?

According to Malaysian Investment Development Authority (Mida), in 2024, Penang’s E&E sector accounted for 45% (RM7.8 billion) of total approved manufacturing investments, and in 1H2025, it rose to 53% (RM6.6 billion).

With over five decades of industrialisation, Penang has developed a resilient and diversified ecosystem, expanding into automation, precision engineering, equipment, medtech, global business services, and food tech to mitigate concentration risks.

*Note: While semiconductor-specific data is not separated from the E&E category, the sector remains a major driver.

2. Between the island and mainland, how are you expanding industrial capacity—through vertical parks, mainland sites, or partnerships with Kulim Hi-Tech Park?

In Penang, most of the industrial parks, both on the island and mainland, are developed by the Penang state government via the Penang Development Corporation (PDC), complemented by several new private industrial parks.

Currently, Penang has more than 1,000 acres of greenfield industrial land on the mainland comprising both state (Batu Kawan Industrial Park 3 (BKIP3) and Bandar Cassia Technology Park (BCTP)) and privately owned (Penang Technology Park@Bertam and Northern TechValley @BKE) sites.

3. What kind of investor profile are you targeting now? What is the ratio of traditional manufacturers, or R&D and design centres?

Penang targets strategic, high-value investments, especially those that can generate a series of multiplier effects in terms of ecosystem relevance, high value-added, global value chain exposures, and supply chain localisation opportunities.

The state focuses on advanced manufacturing and upstream activities aligned with the National Semiconductor Strategy (NSS)—particularly IC design, advanced packaging, and equipment manufacturing.

Particularly, in IC design, Penang has more than 30 years of experience and has more than 40 IC design-related companies residing in Penang, which makes Penang the state with the highest concentration of IC design companies in the nation. To further strengthen this position, Penang has introduced the “Penang Silicon Design @5km+” (PSD@5KM+) initiative.

The PSD@5KM+ initiative aims to benchmark itself to IC design hubs in Silicon Valley in San Jose, USA, and Taiwan, by focusing on three key areas: attracting global IC design players, ensuring a steady supply of skilled professionals for the growing IC design industry and building a world class infrastructure and comprehensive IC design ecosystem.

Penang’s GDP is driven by its twin engines of growth—manufacturing (46%) and services (48%), which are highly interdependent.

4. What incentives or infrastructure improvements are planned to attract higher-end manufacturing (e.g., SiC, advanced packaging, automation robotics)?

Financial incentives are governed by the federal government through Mida.

At the state level, Penang focuses on strengthening infrastructure, streamlining regulations, and reducing or stabilising cost of doing business to attract high-end manufacturing.

Key infrastructure projects include the LRT Mutiara Line and the Penang International Airport (PIA) expansion.

The LRT, expected to operate by 2031, will ease congestion, promote green mobility, and improve connectivity between residential areas and industrial zones. The PIA expansion will nearly double capacity to 12 million passengers annually, enhancing global connectivity, supporting exports, and boosting tourism.

Together, these projects enhance logistics efficiency, strengthen Penang’s position as a manufacturing and services hub, and attract industries requiring robust transport networks.

5. How are you preparing the next-generation workforce to sustain Penang’s innovation ecosystem?

The Penang STEM Talent Blueprint was developed in September 2024, with the vision to build a highly skilled and sustainable STEM workforce to propel Penang towards long-term success in a rapidly evolving industrial and technological landscape, in support of the New Industrial Master Plan (NIMP) 2030 and the National Semiconductor Strategy (NSS) to train and upskill 60,000 high-skilled Malaysian engineers.

(This interview response has been edited for brevity and clarity.)

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