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NE Asia APR 2005 Issue
Industry & Market

Penang Lures Investors to New Cybercity

Malaysia has expanded its Multimedia Super Corridor (MSC) project to the northern state of Penang, designating the manufacturing hub as Cybercity 1. This is the first state to get all the privileges of "cybercity status" after Cyberjaya and Putrajaya,  the twin cities established in the 750 sq km greenfield area south of Kuala Lumpur.

"To serve the national IT agenda further, the MSC will no longer be confined to the original zone, but will expand its borders to the rest of the country," said Prime Minister Abdullah Badawi at the launch.

The MSC was set on fast-track development and, despite the currency and political crises, has drawn over 1,200 local and international companies involved in a variety of technology-related activities. Malaysia hopes its ambitious MSC project and set up of multiple cybercities will make it a developed nation by 2020.

The new cybercity will be the MSC's northern corridor, covering 924 hectares from Bayan Lepas to Sungai Nibong, and is scheduled to be completed in December, 2006.  The new city is close to the Bayan Lepas Free Industrial Zone, which has a total of 207 factories and 90,000 employees.

"The area will be upgraded to become a self-contained intelligent city with a world-class business and living environment and full suite of guarantees," said a spokesperson. Among the guarantees are access to high-speed broadband networks, non-censorship of the Internet, the import of knowledge workers and performance agreements with local utility suppliers with penalties for failure to deliver.

MDC officials said that there are already 40 Penang-based companies with MSC-status, 30 of which have offices in Cyberjaya. MDC is targeting an additional 40 companies to come on board by year's end.

Offshore Base

According to Koh Tsu Koon, Penang Chief Minister, the island's strong semiconductor base already held it in good stead for the new development.

"Being well-developed, we were compliant with most of the criteria (to become a cybercity) before we even started," he said.

Penang is already an established offshore manufacturing enclave for giants such as Intel, Dell, Motorola, Agilent Technologies, Advanced Micro Devices (AMD) and many other American, as well as Japanese, Korean, Taiwanese and European manufacturers.

Several multinationals, including Intel and Agilent, have already expressed interest to enhance their presence in R&D in the new cybercity. Besides research, other companies are looking at software development and call-center and outsourcing operations.

Two existing technology incubators located nearby in Bayan Lepas and at Universiti Sains Malaysia (Science University of Malaysia) will complement the cybercity.

A new company Invest-in-Penang Bhd has been set up as one-stop agency to oversee the rollout of the project. Much of the company's work will involve coordinating with various government agencies at the state and federal level, as well as the private sector on matters concerning utilities, land and office space.

by Julian Matthews

(April 2005 Issue, Nikkei Electronics Asia)

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