A major German chipmaker has opened a new plant in Malaysia.
This comes as companies move to diversify their supply chains amid tensions between the US and China over advanced technology.
Officials from Infineon Technologies held a ceremony at the facility in Kedah State, northern Malaysia on Thursday.
The plant will produce power semiconductors that are used in electric vehicles among other things.
The company is the world’s largest producer of the devices.
Infineon Technologies’ CEO, Jochen Hanebeck said at the event that they have a clear vision about decarbonization and digitalization. He said the plant will play a significant role in fulfilling this goal.
The company says it intends to eventually expand the plant’s production line as demand increases.
US and European chip makers were initially attracted to Malaysia in the 1970s by the country’s abundant labor force.
The government wants to take advantage of its friendly ties with both the US and China to attract further investment.
Malaysian Prime Minister Anwar Ibrahim says his country is now considered to be a hub for the semiconductor industry.
He says his government will continue to do whatever is necessary to attract investment.
The US chipmaker Intel is also undertaking a key expansion at one of its sites in Malaysia. It is part of a 7-billion-dollar investment in the southeast Asian country.