NXP breaks ground on major new chip plant in Malaysia

NXP Semiconductors has kicked off construction on a large new chip assembly and test facility in Petaling Jaya, marking one of the company's biggest manufacturing investments in Malaysia in years. The groundbreaking ceremony brought together NXP executives, government officials and industry partners to mark the start of a project that will roughly double the site's production capacity once complete.

The Dutch-American chipmaker, listed on Nasdaq under the ticker NXPI, is adding about 500,000 square feet of production space to its existing Petaling Jaya operations. When finished, the combined site will span around 900,000 square feet, making it one of NXP's largest assembly and test hubs worldwide.

Assembly and test — often shortened to "A&T" in the industry — refers to the back-end stage of chipmaking, where finished silicon wafers are cut, packaged and tested before being shipped to customers. It's a critical link in the semiconductor supply chain, and one where manufacturers have been racing to add capacity as demand for chips in cars, industrial equipment and consumer electronics keeps climbing.

A smarter chip factory

According to NXP, the new factory won't just be bigger — it will also be smarter. The company says the plant is being designed as a highly automated "smart factory," featuring automated material handling systems and advanced quality-management technology aimed at boosting efficiency and consistency on the production line.

"Malaysia has been an important part of NXP's global manufacturing footprint for decades, with a strong semiconductor ecosystem and skilled talent base," said Andy Micallef, NXP's Executive Vice President and Chief Operations and Manufacturing Officer, in a statement. He added that the expansion builds on that foundation while diversifying operations to strengthen supply chain resilience for customers.

Production at the new facility isn't expected to ramp up until the first quarter of 2028, giving a sense of the scale and complexity of the build. Once running at full capacity, NXP says the site's overall output will more than double.

Malaysia as a strategic chip hub

The expansion fits into what NXP calls its "hybrid manufacturing strategy" — a mix of in-house and outsourced production designed to give the company more control over supply and reduce its exposure to disruptions in any single region. The Petaling Jaya site will work alongside NXP's other assembly and test operations in Greater China and Thailand, as well as feed into output expected from two joint ventures the company has underway: VSMC in Singapore and ESMC in Dresden, Germany.

Malaysia is not new territory for NXP. The company has operated there since 1972, and the country has grown into what NXP describes as a critical hub in its global supply chain. Beyond the new factory, NXP said it continues to invest in the country's future workforce through partnerships with local universities aimed at building up the next generation of semiconductor engineers.

NXP posted $12.27 billion in revenue in 2025 and operates in more than 30 countries, supplying chips used across the automotive, industrial, IoT, mobile and communications infrastructure markets. The Petaling Jaya expansion adds to a broader wave of semiconductor investment across Southeast Asia, as chipmakers continue to diversify their manufacturing footprints beyond traditional hubs in East Asia.

No fixed opening date for the completed facility has been announced beyond the targeted 2028 production ramp-up.