AT&S Plans €2 Billion Malaysia Plant for AI Chip Substrates

Austrian printed circuit board maker AT&S said on 15th June it will invest up to €2 billion in a new production facility in Malaysia, aiming to meet surging demand for advanced substrates used in artificial intelligence processors.

The plant, to be built in Kedah state, will produce IC substrates, the layers that connect chips to circuit boards and manage high-speed data flow. These components have become a bottleneck in AI hardware supply chains as chipmakers push for denser, faster interconnects in processors like Nvidia’s H200 and B200 series. AT&S expects the first phase to begin output in 2028, with capacity scaling through 2032.

Chief executive Andreas Gerstenmayer said the expansion was driven by long-term agreements with semiconductor customers who are building AI data centres at a pace that has outstripped substrate supply. “What we are seeing is not a temporary spike but a structural shift in demand,” he told reporters. The company did not name specific clients but said contracts covered multiple years and included commitments that underpinned the investment.

The Malaysian government has courted high-tech manufacturing with tax breaks and streamlined approvals, drawing investments from Intel, Infineon, and others in recent years. AT&S already operates a plant in Kulim, where it produces substrates for mobile devices. The new facility will focus exclusively on AI and high-performance computing applications, adding roughly 2,500 jobs.

Shares of AT&S rose 4.7 percent in Vienna trading after the announcement. The company has been diversifying beyond its traditional automotive and industrial base, betting that AI infrastructure spending will remain elevated well into the next decade. The Malaysian expansion positions it alongside competitors like Japan’s Ibiden and Taiwan’s Unimicron, both of which have also announced large substrate investments this year.