THE government’s decision to embark on export-led industrialisation over four decades ago saw Penang pioneering the establishment of free trade zones (FTZs) on the island and also in Seberang Prai.
From these factories, names like Intel, AMD, National Semiconductor, Osram, Clarion and their ancillary service providers turned the island state into an export hub for electrical and electronics (E&E) products.
Today, when one steps into the comfort of the Boeing 787 Dreamliner jet, it is due to Singapore Aerospace Manufacturing Pte Ltd, whose subsidiary Aviatron produces nacelle major machine parts for Entry-into-Service aircrafts, namely Boeing 787 Dreamliner, Airbus 350 XWB, Bombardier C Series and Mitsubishi Regional Jet from its 150,000 sq ft facility at the Penang Science Park in Bukit Minyak on mainland Penang.
On Penang island, SAM Malaysia is touted as Malaysia’s only high-precision engineering company producing complex aero-engine parts for commercial planes.
“SAM acquired LKT Industrial Bhd in 2009 for a strategic reason,” said SAM Malaysia chief executive officer Jeffrey Goh.
“The company has the equipment integration skills and we could incorporate this with our aerospace precision machining to move up the value chain in the aerospace industry.”
A second, though not main reason, for the acquisition of the homegrown LKT, said Goh, was that SAM could leverage the aerospace machining to make headway into the higher value semiconductor front-end equipment business.
“The start-up,” said Goh, “was tough and we could not find people with the appropriate skills set to manufacture aerospace products and so we needed to deploy people from Singapore to oversee the aero-space operations.
“We worked with the Northern Corridor Implementation Authority and institutions such as the Japanese Malaysian Technical Institute, German-Malaysian Institute and Penang Skills Development Centre.
“Today, we offer scholarships and internships to support this arrangement.”
With 900 people hired in Penang currently, SAM expects to increase its headcount by another 20 to 25 per cent in the next five years.
Also on growth mode is Flextronics International Ltd, which is a leading sketch-to-scale solutions company that designs and builds “intelligent” products.
The Nasdaq-listed and Singapore headquartered Flex acquired electronics manufacturing services company Solectron Corp in 2007.
Today, Flextronics has six facilities in Penang and a headcount of 8,500 with plans to hire 500 more (half of whom would be engineers), in tandem with its growth.
“Flextronics started off by manufacturing simple motherboards and flexible circuit boards in the early 1990s,” said a company spokesman. “Today, our operations in Penang provides complete sketch-to-scale solutions for diverse products that enable intelligence in everything from servers to networking equipment, super computers and infotainment controllers.”