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It’s no secret that last year’s earthquake in Japan and flooding in Thailand had a major impact in the technology world. According to a report by the Asian Wall Street Journal (WSJ), companies like Western Digital Inc, Sony Corp and Toshiba Corp had no choice but to shut down their plants in Thailand due to the floods. Because of this, many manufacturers began looking elsewhere to expand their growth, and Penang was one of the countries that seemed like a safe bet.
WSJ reported that at one time, global prices for disk drives doubled, before Western Digital (who suffered a big hit from Thailand’s floods) and other manufacturers began boosting production in Malaysia immediately after the floods. “The company is now expanding across Malaysia in a five-year, $1.2 billion effort to whittle down its dependence on Thailand. A new Malaysian plant is also expected to open this year.”
WSJ also reported that companies such as Intel Corp, Bose Corp, National Instruments Corp and others have also started expanding their operations in Malaysia. In time, Penang is expected to see more multinational companies expanding their productions in the state and other places in Malaysia.
Although minor, there is only one risk for companies investing in Malaysia; the country is undergoing a sort of political disorder as the ruling party, Barisan Nasional, is facing competition from the opposition. This means that opposition parties in states such as Pakatan Rakyat that governs Penang could in time face problems with Kuala Lumpur, the federal capital.
With all these companies expanding their investments in Penang, the states Chief Minister Lim Guan Eng is hoping for another big and prosperous year for investment after taking steps to eliminate red tape, like pushing the construction of new industrial parks to make it easier for companies to expand here.
“We had fallen off the radar screen, so we went back to the drawing board,” he was quoted as saying. “It just takes a little time to shake off the rust.”
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