Malaysia Deepens Semiconductor Supply Chain with $125M IFC-Backed Polysilicon Project

Malaysia is set to deepen its role in the global semiconductor supply chain with a major new investment backed by the World Bank Group's private-sector arm, the International Finance Corporation (IFC), aimed at boosting high-value manufacturing and creating skilled jobs.

The IFC will provide up to $125 million in financing to OCI TerraSus Sdn. Bhd. (OCI TRS), a Malaysian subsidiary of South Korea's OCI Holdings, to support the construction of a state-of-the-art semiconductor-grade polysilicon manufacturing facility in Bintulu, Sarawak.

First-of-Its-Kind Facility in Southeast Asia

The planned facility—developed through a joint venture with Japan's Tokuyama Corporation—will be the first in Southeast Asia to produce ultra-high purity polysilicon for semiconductor applications.

Polysilicon is a critical input in the production of:

• Silicon wafers

• Semiconductor chips

• Advanced electronics and AI-driven technologies

Once operational, the plant is expected to significantly strengthen Malaysia's position in the global semiconductor value chain, a sector increasingly central to digital economies and emerging technologies.

Clean Energy at the Core of Manufacturing

A defining feature of the project is its commitment to sustainability. The facility will be powered by clean and renewable energy, aligning with global efforts to decarbonise industrial production and meet rising environmental, social, and governance (ESG) expectations.

The investment also includes:

• Upgrading corporate governance frameworks

• Enhancing ESG management systems

• Strengthening environmental and labour compliance standards

This reflects a broader shift in global manufacturing, where ESG performance is becoming a key determinant of competitiveness and investment attractiveness.

Driving Jobs and Industrial Upgrading

The project is expected to generate high-quality employment opportunities, particularly in advanced manufacturing, engineering, and technical roles, supporting Malaysia's ambition to move up the industrial value chain.

"Value-added manufacturing industries are key job creators and central to Malaysia's economic strategy," said Judith Green, World Bank Group Country Manager for Malaysia.

The initiative aligns with national priorities to:

• Develop high-tech industries

• Attract foreign direct investment

• Build a skilled workforce in emerging sectors

Strategic Positioning in a High-Growth Industry

Global demand for semiconductors continues to surge, driven by:

• Artificial intelligence and data centres

• Electric vehicles and renewable energy systems

• Consumer electronics and digital infrastructure

This has intensified competition among countries to secure positions within semiconductor supply chains, particularly in upstream materials such as polysilicon.

OCI Holdings Chairman Lee Woo Hyun highlighted the strategic importance of the project, noting that demand for high-purity materials will continue to rise alongside technological advancements.

"This partnership strengthens our ESG practices and competitiveness while reinforcing Malaysia's role as a strategic partner in the global semiconductor ecosystem," he said.

IFC's Expanding Role in Malaysia

The project also marks IFC's first investment in Sarawak, signalling growing international confidence in the region as an industrial hub.

Beyond financing, IFC's involvement will support:

• ESG advisory and implementation

• Operational and governance improvements

• Long-term resilience and sustainability planning

A Milestone for Malaysia's Economic Transformation

The development represents a significant step in Malaysia's transition toward high-value, technology-driven manufacturing, positioning the country to capture greater value from global supply chains.

By combining advanced industrial capability with sustainability and international partnerships, the project sets a benchmark for future investments in Southeast Asia's semiconductor sector.

As construction progresses, the facility is expected to play a pivotal role in:

• Strengthening regional supply chain resilience

• Reducing dependence on limited global production hubs

• Supporting the next generation of digital and AI technologies