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Technology

Malaysia Builds a New ‘Silicon Island’ to House Its AI Ambitions

A Malaysian flag near the construction site for Silicon Island reclamation works.Photographer: Samsul Said/Bloomberg

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By Netty Idayu Ismail

October 7, 2026 at 11:00 PM UTC

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Just south of Penang, the historic trading island off Malaysia’s northwest coast, excavators are turning a stretch of blue-green sea into a new, man-made island. Dump trucks crisscross freshly reclaimed sand as orange pipes snake across the emerging land mass, carrying fill pumped from dredgers offshore.

Once complete sometime next decade, this 2,300-acre area, called Silicon Island, is expected to entrench Malaysia’s role in the global semiconductor industry, adding hundreds of billions of dollars to its economy and creating some 220,000 jobs by 2050. Almost three times the size of New York’s Central Park, it’s envisaged the island will also be home to office towers, hotels and waterfront apartments.

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