The cancelled semiconductor project costing RM2 billion by ams Osram AG in Kedah is protected by a robust agreement with the Austrian-German technology giant.
Osram a few weeks ago pulled the plug on its recently-completed micro LED plant in Kulim Hi-tech Park with an estimated US$1 billion (RM4.75 billion) multiyear, multi stage investment. The current building represents the first phase of that investment. It is now seeking a buyer to take over the lease of its Kulim micro LED plant.
Source: https://commons.wikimedia.org
That lease is held by PNB, EPF and KWAP who came together in 2023 through a €400 million (RM2.03 billion) sale and leaseback of the micro LED site with a commitment from Osram to buy it back from the funds after 10 years.
PNB, in a statement, said the three local funds and Osram are in regular contact to explore alternative solutions to ensure a mutually beneficial outcome for all involved. This includes looking for a different party to take over Osram's lease.
Robust agreement or not, this is the problem of accepting investors who are “fickle”. We already have Citibank, Goodyear, Exxon Mobil, Shell who have exited or intend to exit Malaysia. Now we have a facility already completed for a German manufacturer costing RM2 billion. It could be its financial status or for some other reason that this venture is stalled. Whatever the case, this facility is now a monument to FDIs unless a replacement lessee is found soon!
Reference:
Malaysian funds say their RM2 bil investment in cancelled Osram’s Kedah project is “protected”, S Joan Santani, New Straits Times, 19 May 2024
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