Mitsui Kinzoku to Invest $1.2 Billion in Copper Foil Plant in Malaysia

Japanese metal materials manufacturer Mitsui Kinzoku has announced plans to invest approximately 190 billion yen ($1.2 billion) in a new copper foil factory in Shah Alam, Malaysia. This investment aims to meet the increasing demand for materials used in artificial intelligence (AI) infrastructure, particularly in data centers and semiconductor applications.

The new facility, which is expected to commence operations in 2031, will be built on land adjacent to Mitsui Kinzoku's existing Malaysian operations. The factory will produce two types of copper foil: MicroThin and VSP. MicroThin copper foil is essential for semiconductor package substrates and is anticipated to have a production capacity of 4 million square meters per month initially, expanding to 12 million by fiscal 2033. VSP copper foil, used in high-frequency circuit boards for networking equipment, is expected to start with a capacity of 1,200 tons per month and increase to 2,600 tons per month by fiscal 2033.

“Mitsui Kinzoku said the new factory will significantly increase production capacity to meet the rising demand from AI and semiconductor sectors.”Mitsui Kinzoku, company official

According to company officials, the demand for copper foil is driven by the growing AI sector, particularly for optical transceivers that facilitate communication between servers. The company aims to increase its production capacity significantly, with projections suggesting a 2.4-fold increase for MicroThin foil and a 3.6-fold increase for VSP foil compared to current levels by fiscal 2033.

“Prime Minister Anwar Ibrahim has outlined goals reflecting Malaysia's strategy to become a leading hub for semiconductor manufacturing.”Malaysian government

In addition to Mitsui Kinzoku, other companies are also expanding their production capabilities in response to the rising demand for AI-related components. For instance, Furukawa Electric recently announced plans to increase production of its own copper foil products, indicating a broader trend within the industry.

Prime Minister Anwar Ibrahim has set a goal of attracting $120 billion in semiconductor investments by 2030, reflecting Malaysia's ambitions to position itself as a key player in the semiconductor and materials sectors.