[News] Chip Packaging Giant ASE to Acquire ADI’s Penang Plant, Expand Southeast Asia Footprint by 1H26

Southeast Asia is fast becoming a key semiconductor hub, particularly in advanced packaging, attracting major players to expand their regional footprint. Taiwan-based chip packaging giant ASE announced a strategic partnership with Analog Devices (ADI) on Oct. 21, signing a binding MoU to acquire ADI’s Penang plant in Malaysia. According to the company, the final deal is expected in 4Q25, with completion targeted for 1H26.

The Economic Daily News notes that ADI, the world’s second-largest analog IC supplier, established its Penang plant in 1994 in Bayan Lepas with a facility spanning over 680,000 square feet. Once finalized, ASE will operate and further develop the Penang site to support ADI and other customers, the report adds.

Earlier in February, ASE has officially opened its fifth plant in Penang, further strengthening its packaging and testing operations in the Bayan Lepas Free Industrial Zone. The new facility is part of a strategic expansion, set to increase ASE’s Malaysia footprint from 1 million to around 3.4 million square feet. With the acquisition of ADI’s plant, ASE could gain an additional boost in local production capacity.

Shaping Strategic IDM–OSAT Collaboration

As Commercial Times highlights, ASE, one of Penang’s largest and most advanced OSAT providers, is doubling down on its presence with the acquisition of ADI’s subsidiary. Industry experts cited by the report note that the two parties have long collaborated on high-reliability packaging and mixed-signal chips, and the expanded partnership is expected to further integrate their capabilities in SiP solutions and high-power modules.

Notably, the deal carries broader strategic significance. Commercial Times suggests that as companies pursue multi-region strategies and risk diversification, IDM–OSAT partnerships are evolving from traditional contracts into strategic collaborations.

Under the agreement, ADI, a global leader in analog ICs for automotive, communications, industrial, and consumer applications, will collaborate with ASE through equity cooperation to ensure a stable supply of high-end analog chip packaging and testing, the report adds.

Semiconductor Giants’ Move in Malaysia

Other chip giants are also boosting their presence in Malaysia. In August 2024, Infineon Technologies unveiled the first phase of a new fab, set to become the world’s largest 200mm silicon carbide (SiC) power semiconductor facility. The €2 billion investment will reportedly focus on SiC power semiconductor production and feature gallium nitride (GaN) epitaxy.

On the other hand, as per Malaysian Investment Development Authority, U.S. memory titan Micron has steadily expanded its footprint in Malaysia since establishing facilities in Muar (2010), Prai (2018), and Batu Kawan (2020).

Its Malaysian operations produce key products such as NAND flash memory, compute DRAM, client and enterprise SSDs, and DIMMs, the agency notes.

However, some semiconductor giants have also abandoned investment plans in Malaysia. As per The Star, as of February 2025, Intel has put its Penang wafer fabrication and advanced packaging project on indefinite pause, following the relocation of the last 200 advanced packaging engineers to New Mexico, with no plans to resume.

The report notes that the stillborn project had represented a US$9 billion landmark for Malaysia’s semiconductor sector, intended to be Intel’s first advanced 3D chip packaging facility outside the US, the country’s first 300mm wafer fab, and the first deployment of an ASML Deep Ultraviolet lithography system in Malaysia.

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(Photo credit: ASE)