GEORGE TOWN (April 4): The front-end section or wafer fabrication manufacturing of the semiconductor sector in Southeast Asia is expected to see a capital expenditure (capex) growth of between US$1 billion and US$1.8 billion or 77% this year, driven by the light-emitting diode and internet of things and flash devices segment.

Semicon Southeast Asia president Ng Kai Fai told a press conference that the rise in capex was a result of increase in demand for storage equipment and tablets in the world.

He added that with the growth of the front-end segment, the back-end manufacturing segment, which Southeast Asia was mostly home to, would expand in tandem at 6% in 2016.

Earlier, Ng mentioned that Penang is again hosting the Semicon Southeast Asia event this year with 280 booths featuring 200 exhibitors from the manufacturing sector, including integrated circuit and electronic manufacturing services, at the Subterranean Penang International Convention and Exhibition Centre from April 26 to 28.

"The event organised by SEMI, an association for global semiconductor manufacturers, (which) aims to champion regional collaboration, open new business opportunities for customers and foster stronger cross-regional engagement.

"We have sold out exhibition space. We expect a record 7,500 to 8,000 delegates visiting the event over the three days," he said.

Ng added that the event will focus on key trends and solutions in semiconductor design including emphasis on serving the needs of expanding applications markets.

Special adviser to Chief Minister and Invest-in-Penang Bhd (InvestPenang) director Datuk Lee Kah Choon said that last year, the state contributed 65% of total investments to Malaysia, of which more than 50% was from total investments for the electronic and electrical (E&E) sector for the same period.

"Malaysia's microelectronic segment accounts for 11% to 12% of the world's assembly, packaging and test product, and Penang contributed 50% to the total E&E sector for the country," he said.