Tariff-resistant growth: How AT&S is solidifying Malaysia’s semiconductor stance

AT&S, a Vienna-listed global manufacturer of high-end printed circuit boards (PCBs) and integrated circuit (IC) substrates, finds itself benefitting from booming global demand for high-performance chips and substrates which are essential for data centres, AI, and electronics.

Since selecting Malaysia as its first manufacturing location in Southeast Asia in 2021, its new campus in Kulim Hi-Tech Park, Kedah, currently produces high-end PCBs. In 2024, it announced that it would start producing high-end IC substrates that will cater almost exclusively to US semiconductor company Advanced Micro Devices (AMD).

With the expected exponential increase in data volume, the demand for data storage, transmission and analysis is robust. According to Ingolf Schroeder, EVP Business Unit Microelectronics at AT&S, the company is a sought-after technology partner and the number of customers for the Kulim plant will grow significantly, with an additional four to five high-profile clients joining this and the next financial year.

Optimising interconnect technology for a demand boom

What are IC substrates? What important role do they play in microprocessors? AT&S CEO Andreas Gerstenmayer has described that the Kulim plant now has the capability to produce substrates for packaging, and highlighted that IC substrates are often underestimated.

They are critical components in modern processors because of their role in ensuring processors operate efficiently and reliably. They provide high-density interconnects between a processor and PCBs for faster data transfer and reduced signal loss. Some would even say they provide thermal management to prevent overheating, protection from mechanical stress, and more surface area to accommodate more complex wiring for multi-core architectures and 3D packaging.

This aligns perfectly with the company’s decision to invest about RM5 billion in the plant and administrative building of the overall Kulim campus. This investment has been made to prepare the facility to reach high volume manufacturing (HVM) status, an achievement validated by AMD’s recognition of the Kulim campus as a certified HVM site since March 2025, as well as its rapid movement towards a multi-customer environment.

Local supply chain

The EVP shared that AT&S is currently ranked number 5 for IC substrate manufacturing, and targets to move to number 3 ranking with Kulim being an important contributor to its rise up the ranks.

“AT&S can now benefit from a new, tightly integrated ‘Substrate Triangle’ consisting of its plants in Chongqing in China, Kulim in Malaysia, and Leoben in Austria. Know-how, technologies and research in these locations are constantly shared and improved, which helps all three plants to achieve full potential.”

AT&S in Malaysia currently boasts 1,500 employees, with RM600 million investment poured into R&D, and close cooperation initiated with local parties, for example CREST (Collaborative Research in Engineering, Science & Technology) and MITI (Ministry of Investment, Trade and Industry).

“We are in the midst of phase one and because of the economic downturn, we have decided to pause with the second building here. Once the market is fully recovered, we are going to restart,” Ingolf said, emphasising that with over RM5 billion investment already made, “…we are able to restart whenever we need to, pretty fast.”

With an established foundation already in place, AT&S is poised to develop and grow local content, or the raw materials required to produce IC substrates. “We are sourcing a lot of raw material from outside Malaysia, but we have a good chance of developing the local supply chain in the next few years,” said Ingolf.

The objective is to give itself as much flexibility as possible to move products or customers between their manufacturing sites within the Substrate Triangle.

What tariff impact?

Ingolf stated, and Malaysia’s country manager, Yap Suan See, reiterated that AT&S is not affected by US and retaliatory tariffs because “…we are not supplying the final product (semiconductors). We are, let’s say, part of the package.”

He did add that the company is carefully investigating among its customers about potential impacts. “But again, at the moment we do not see any change. We are not affected by any tariff, and we are running and ramping up our production here.”

Suan See also explained that any impact from the US and retaliatory tariffs would be indirect and due to two main reasons: change in customer demand or change in enterprise sentiment because of ongoing uncertainty.