Austria’s AT&S plans US$2.32 billion Malaysia expansion to boost semiconductor production and AI supply chains

KUALA LUMPUR, MALAYSIA: Austrian semiconductor company Technologie & Systemtechnik Aktiengesellschaft (AT&S) is set to expand its operations in Kulim, Kedah, with a planned investment of up to €2 billion (RM9.4 billion, approximately US$2.32 billion), a move expected to strengthen Malaysia’s semiconductor ecosystem and create high-skilled employment opportunities.

Prime Minister Datuk Seri Anwar Ibrahim said the expansion demonstrated increasing international investor confidence in Malaysia and reflected the country’s growing role as a destination for advanced technology investments.

In a Facebook post on 16 June 2026, Anwar said clear policies, political stability, good governance and the government’s commitment to economic transformation were helping position Malaysia as a regional growth hub for advanced industries.

“Meetings and discussions held in early June have borne fruit, with AT&S announcing its intention to expand its operations in Kulim, Kedah, further reinforcing Malaysia’s position as a destination for high-impact technology investments,” Anwar said.

Strengthening Malaysia’s semiconductor ecosystem

Anwar was commenting on AT&S’ announcement that it planned to invest between €1.5 billion and €2.0 billion to expand its Kulim manufacturing site, supported by long-term commitments from customers.

He said the development reinforced mutual trust and commitment towards Malaysia’s digital economy, translating strategic partnerships into high-impact investments for the country.

The investment is expected to deepen Malaysia’s semiconductor capabilities by expanding advanced manufacturing capacity and supporting demand for increasingly complex electronic components.

AT&S said the expansion followed agreements with its customer AMD and another leading technology company, reinforcing the company’s technological position and strengthening long-standing partnerships within the semiconductor industry.

The company said the expansion would build on the successful ramp-up of Plant 1 in Kulim and involve the fitting out of the existing Plant 2 structure.

It will also include construction of a new manufacturing facility focused on integrated-circuit substrate cores and advanced printed-circuit boards.

AT&S leadership highlights long-term growth

AT&S chief executive officer Michael Mertin said the Kulim expansion reflected customers’ confidence in the company’s capabilities and their shared commitment to sustainable long-term growth.

“Our technological leadership, strong partnerships with global players in the semiconductor industry and proven ability to scale advanced manufacturing facilities position us as the partner of choice for the next wave of growth,” he said.

Mertin added that the expansion demonstrated the trust customers placed in AT&S’ ability to support future semiconductor industry requirements.

AT&S chief financial officer Gerrit Steen said the planned investment was fully supported and financed through long-term customer commitments.

“We are structuring these agreements to support long-term growth while maintaining financial discipline,” Steen said.

“At the same time, they support our objective of further strengthening our balance sheet and financial flexibility,” he added.

AI-driven semiconductor demand shapes expansion

AT&S said the expansion comes amid unprecedented demand linked to the global development of artificial intelligence infrastructure.

The company said the semiconductor industry had historically experienced cyclical trends, but the current AI-driven cycle represented a broader structural shift in how computing systems were designed, developed and scaled.

The company highlighted the transition from traditional monolithic chip designs towards chiplet-based architectures as a major factor increasing demand for advanced integrated-circuit substrates.

According to AT&S, demand growth was expanding beyond graphics processing units to include central processing units, memory technologies and increasingly complex heterogeneous system architectures.

The company said the rise of agentic AI was further increasing computational requirements, creating demand for larger and more advanced substrate solutions.

Customers were also placing greater emphasis on performance per watt, energy efficiency and new system architectures, driving demand for higher integration density, larger substrate formats, increased layer counts and faster innovation cycles.

Financial outlook and investment plans

AT&S said the €1.5 billion to €2.0 billion investment was based on agreed key terms and remained subject to final negotiation and execution.

The company said customer payments linked to the agreements were expected to positively affect revenue and earnings during the current year, while the full operational impact would be realised over the following years.

For financial year 2026/27, AT&S revised its expectations for constant-currency revenue growth to 45% to 55% compared with the previous year.

The company had previously forecast revenue growth of 30% to 35%.

AT&S now expects an EBITDA margin of 32% to 37%, compared with its previous forecast of 25% to 29%, representing a further increase in profitability.

The expansion plans have also increased the company’s capital expenditure expectations. AT&S now plans capital expenditure of approximately €1.0 billion to €1.2 billion for 2026/27, compared with an earlier estimate of €400 million.

The company expects the higher investment level to be accompanied by positive operating free cash flow.

AT&S said its forecast assumes no significant deterioration in geopolitical conditions or in the current tight supply of key materials such as fiberglass mats.

The company said management would continue monitoring developments and remain prepared to adjust plans where necessary.

Global technology footprint

AT&S is a global manufacturer of high-end integrated-circuit substrates and printed-circuit boards, producing advanced interconnect technologies for mobile devices, automotive and aerospace industries, industrial applications, medical technology and high-performance computing for artificial intelligence applications.

The company operates production sites in Austria, China, Malaysia and India, alongside a European research and development competence centre for IC substrate production in Leoben, Austria.

AT&S currently employs around 14,000 people worldwide and said it continues to focus on research, development and responsible resource use as part of the digital transformation.