Intel is expanding its operations in Penang, to make its operations there capable of assembling the Pentium 4 processor. Malaysia will be the first Asian country to produce the chip.
The No 1 chipmaker will add 100 staff to its 8,500 workers in Northern Penang over the next two years, and plans to establish a microprocessor design center in the country.
Other chipmakers are scaling back their operations amid a poor market, but Intel seems confident that business will look up in the later part of the year.
"The industry has bottomed out," Intel CEO Craig Barrett said. "There will be an uptick in demand in the third and fourth quarters."
Intel has been in the country since 1972, and has spent US$1.9 billion on its Penang facilities, which are the company's largest assembly, test and manufacturing operations, Bloomberg reported.
The news service did not say how much this new round of investment would be worth.