The new advanced packaging facility in Malaysia is expected to begin production in 2024, chief executive officer Pat Gelsinger said today.

The investment is expected to create more than 4,000 direct positions and more than 5,000 construction jobs in the country, the government said.

Last month, the US and Malaysia said they planned to sign an agreement by early next year towards improving transparency, resilience and security in the semiconductor and manufacturing sector supply chains.

A global shortage of semiconductor chips, caused partly by a pandemic-fuelled demand for electronics and disruptions in supply chains, has seen carmakers cut production and delays in smartphone deliveries at companies, including Apple Inc.

Malaysia’s chip assembly industry, accounting for more than a tenth of a global trade worth over US$20 billion, has warned that shortages will last at least two years.

“This undertaking is indeed timely given the bullish global demand driven by the chip shortages and the potential challenges arising from the recovery of the pandemic globally,” international trade and industry minister Azmin Ali said in a statement.

Intel opened its first production facility outside the US at a 2ha assembly site in Penang in 1972. By 1975, it employed about 1,000 people and had become a crucial part of the company’s manufacturing chain, its website said.