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Wednesday, 14 March 2012

Taiwan's Phison IC design project, a 'brain gain' for Malaysia


KUALA LUMPUR: Phison Engineering Corp will set up a branch in Malaysia, with operations targeted to begin in the next three to six months.

The Taiwan-listed company, which specialises in the design of integrated circuit (IC) for use in data storage devices, would base its Malaysian unit in the northern region.

It would operate as a wholly-owned subsidiary before becoming an “independent” company after three years.

“We choose the northern region in Malaysia because we find that there is some semblance of ecosystem there that can provide a better environment for our operations to thrive,” Phison chairman and CEO Pua Khein-Seng said.

“We also want to be close to our clients who are mostly based in the north for the sake of cost as well as operational efficiencies,” he said at a press conference in conjunction with the launch of his book, Driven to Success.

Pua, a Malaysian raised in Sekinchan, Selangor, founded Phison with four of his university friends in 2000. He left to study engineering in Taiwan in 1993 and lived there after graduation.

For a start, Phison will have Silterra Malaysia Sdn Bhd, a semiconductor wafer maker owned by Khazanah Nasional Bhd, as the main partner for its Malaysian unit.

On the initial capital outlay for Phison's project in Malaysia, Pua said it would range from US$1mil (RM3.03mil) to US$3mil.

He stressed that Phison was not a “manufacturing” operation that required high capital investment to set up operations and buy equipment. All it needed was the right amount of space and several engineers.

“Our Malaysian unit will have the full support of our team in Taiwan during the initial stage because we want to ensure 100% success of our venture in Malaysia,” Pua said.

StarBizWeek broke the news about Pua planning to set up a Phison branch in Malaysia last Saturday.

The report, quoting sources, also said Mida had drawn up a list of attractive incentives to entice Pua to set up the IC design house in Malaysia.

Mida CEO Datuk Noharuddin Nordin said the incentives were one of the attractions.

“But while we cannot disclose the details of the incentives we are giving Phison, we can tell you that whatever we give to Phison is nothing more than what we are giving to our other investors.”

“Historically, the E&E (electrical and electronics) sector has been a major contributor to Malaysia's gross domestic product growth,” he said.

“Under the Economic Transformation Programme, which includes E&E as the National Key Economic Areas, IC design has been identified as one of the key components that would accelerate the growth of the semiconductor cluster in Malaysia, with a target of 50 new IC design houses and five more Mature Technology Semiconductor Foundries to be established by 2020,” he said.

He added that the initiative was expected to generate an additional gross national income of RM7.4bil and create 8,500 highly skilled jobs for the industry.

Describing Pua's project in Malaysia as “brain gain” for Malaysia, Noharuddin said he hoped Phison's presence would help establish an ecosystem that would encourage overseas talent to return to the country.

Pua has a 2.55% stake Phison that has a market capitalisation of NT$47bil (RM4.8bil).

The company counts heavyweights such as Toshiba Corp, Kingston Technology, Vanguard Group Inc, Blackrock and Fidelity as its other shareholders.

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