page_title: Bayan Lepas Free Industrial Zone
section_title: History
hierarchical_section_title: Bayan Lepas Free Industrial Zone / History
caption_attribution_description: English: Aerial view of the Bayan Lepas Free Industrial Zone, as seen from a landing plane on its descent towards the Penang International Airport.
context_page_description: 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. 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.
context_section_description: 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. 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%. Lim identified the electronics sector as having the best potential to absorb the state's excess semi-skilled workforce.
  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. The Penang Development Corporation (PDC) was tasked with the construction of both the zone and the residential township. 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.
  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. 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. Phase 3 was partially built on reclaimed land, while Phase 4, the largest and final phase, was completed by the 1990s.
  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. 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. These firms are also supported by smaller, local-owned enterprises and startups, such as Piktochart. 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.
caption: Aerial view of the Bayan Lepas Free Industrial Zone
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