Bayan Lepas Free Industrial Zone

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Bayan Lepas Free Industrial Zone
Bayan Lepas Free Industrial Zone, Penang.jpg
Bayan Lepas Free Industrial Zone is located in George Town, Penang
Bayan Lepas Free Industrial Zone
Bayan Lepas Free Industrial Zone
Location within    George Town in    Penang
Coordinates: 5°18′2.16″N 100°17′24″E / 5.3006000°N 100.29000°E / 5.3006000; 100.29000Coordinates: 5°18′2.16″N 100°17′24″E / 5.3006000°N 100.29000°E / 5.3006000; 100.29000
CitySeal of George Town.svg George Town
 • Local governmentPenang Island City Council
 • Total600 ha (1,400 acres)
Time zoneUTC+8 (MST)
 • Summer (DST)Not observed
Postal code
Area code(s)+6046

The Bayan Lepas Free Industrial Zone is a high-tech manufacturing area in Bayan Lepas, near the southeastern tip of Penang Island in Penang, Malaysia. Created in 1972, the area is Malaysia's first free-trade zone and was instrumental in alleviating an economic crisis in Penang.[1][3][4] The zone is now home to various multinational firms, including Bosch, Motorola, Dell, Intel and Hewlett-Packard, and has been regarded as the Silicon Valley of the East.[5][6][7]


The 1,400-acre (5.7 km2) Bayan Lepas Free Industrial Zone was the brainchild of Lim Chong Eu, who served as the Chief Minister of Penang between 1969 and 1990, as a measure to alleviate Penang's economic downturn at the time.[3][4][2] George Town, Penang's capital city, had its free port status revoked by the Malaysian federal government in 1969, leading to massive unemployment which peaked at 16.4%.[3] Lim identified the electronics sector as having the best potential to absorb the state's excess semi-skilled workforce.[4]

Nearly 1,000 acres (4.0 km2) of land adjacent to the Penang International Airport were acquired for the construction of Malaysia's first free trade zone, as well as the adjacent township of Bayan Baru.[8][9] The Penang Development Corporation (PDC) was tasked with the construction of both the zone and the residential township.[10][11] To attract Multinational corporations to the zone, the Free Trade Zones Act was enacted by the Malaysian federal government in 1971 and pioneer tax incentives were offered.[4][12]

Aerial view of the Bayan Lepas Free Industrial Zone

The first phase of the Bayan Lepas Free Industrial Zone, covering an area between the airport, Jalan Sultan Azlan Shah and the Kluang River, was opened in 1972.[1][8][13] The zone has since been expanded and developed in phases. Phase 2 encompasses an area between Jalan Sultan Azlan Shah, Bukit Gedung and the Snake Temple.[13] Phase 3 was partially built on reclaimed land, while Phase 4, the largest and final phase, was completed by the 1990s.[13]

The Bayan Lepas Free Industrial Zone proved successful in attracting multinational firms and its creation played a vital role in reversing Penang's economic crisis.[3][4] Intel, AMD, Hewlett-Packard, Clarion, National Semiconductor, Hitachi, Osram, and Bosch—collectively known as the Samurai Eight—were the first multinational companies to set up factories within the zone, followed by several other firms including Motorola and Dell.[14] These firms are also supported by smaller, local-owned enterprises and startups, such as Piktochart.[7] Consequently, the manufacturing sector became one of Penang's largest economic sectors, while the zone itself has been described by the international press as the Silicon Valley of the East.[5][6][7][15]


The following is an incomplete list of multinational firms within the Bayan Lepas Free Industrial Zone.

Phase 1[edit]

Phase 2[edit]

Phase 3[edit]

Phase 4[edit]

See also[edit]


  1. ^ a b c Yeow, Teck Chai. "The Development of Free Industrial Zones–The Malaysian Experience" (PDF). World Bank. Cite journal requires |journal= (help)
  2. ^ a b "Innoplex to attract world-class industrial players | Buletin Mutiara". Retrieved 3 March 2018.
  3. ^ a b c d "The man behind Penang's economic transformation". The Star. Retrieved 30 November 2017.
  4. ^ a b c d e Ooi, Kee Beng (December 2009). "Tun Lim Chong Eu: The past is not passé". Penang Monthly. Retrieved 30 November 2017.
  5. ^ a b Roughneen, Simon (15 July 2015). "Styling itself as the 'Silicon Valley of the East'". Nikkei Asian Review.
  6. ^ a b "Penang: Malaysia's secret silicon island". BBC News. Retrieved 4 February 2018.
  7. ^ a b c "A Silicon Valley of the East: Penang's thriving start-up community". Channel NewsAsia. Retrieved 4 February 2018.
  8. ^ a b Peter Nijkamp, Amitrajeet A. Batabyal (2016). Regional Growth and Sustainable Development in Asia. Springer. ISBN 9783319275895.
  9. ^ Sue-Ching Jou, Hsin-Huang Michael Hsiao, Natacha Aveline-Dubach (2014). Globalization and New Intra-Urban Dynamics in Asian Cities. Taipei: National Taiwan University. ISBN 9789863500216.
  10. ^ Shahril Cheah (October 2010). "Penang's development still depends on the PDC". Penang Monthly. Retrieved 3 March 2018.
  11. ^ Ooi, Kee Beng (2010). Pilot Studies for a New Penang. Singapore: Institute of Southeast Asian Studies. ISBN 9789814279697.
  12. ^ "Transformation of Bayan Lepas into free trade area does not diminish its attractions | Wong Chun Wai". Retrieved 3 March 2018.
  13. ^ a b c "Review for Bayan Lepas Free Trade Zone, Bayan Lepas". PropSocial. Retrieved 3 March 2018.
  14. ^ Fikri Fisal (August 2016). "PDC – Making Penang Lead". Penang Monthly. Retrieved 3 March 2018.
  15. ^ "Penang Economic Indicators" (PDF). Penang Monthly.