Malaysia is developing Silicon Island, a 930-hectare artificial island off Penang, to expand its semiconductor industry and attract investment driven by growing demand for artificial intelligence technology.
The project aims to address a shortage of industrial land in Penang, which has developed into a major electronics manufacturing centre over more than five decades. The new island is expected to accommodate companies involved in semiconductor manufacturing, chip design and advanced packaging.
Once completed, Silicon Island is projected to support around 220,000 direct, indirect and induced jobs by 2050 and contribute up to RM1.1 trillion to Malaysia’s GDP over the same period. Plans also include commercial, housing and tourism developments.
The project is being developed by Silicon Island Development, in which Gamuda holds a 70 per cent stake and the Penang state government owns the remaining 30 per cent.
Industrial land sales are expected to begin in early 2027, with the development scheduled to be completed in phases over the coming years. The project will also require transport links and supporting infrastructure to connect the island with Penang’s existing industrial areas.
Malaysia is seeking to move further into higher-value semiconductor activities as global demand for chips used in AI systems increases. Penang already hosts a substantial electronics and semiconductor industry, but limited available land has constrained further expansion.
Silicon Island is intended to provide space for new industrial facilities and related businesses. Its success will depend on attracting investors as development progresses and on delivering the infrastructure needed to support manufacturing operations.
