HONG LEONG Investment Bank (HLIB) recently engaged with FusionAP to gain deeper insight into its strategic direction and its role in addressing Malaysia’s shortfall in advanced semiconductor packaging.
Founded in 2025, FusionAP is an early-stage, pre-revenue venture aiming to establish itself as the country’s first homegrown advanced packaging OSAT.
The company positions itself as a neutral, reliable partner for global semiconductor players amid shifting geopolitical dynamics.
To fast-track its capabilities, FusionAP intends to collaborate with leading international research institutions, enabling access to licensed technologies and joint development of intellectual property, particularly in areas such as silicon interposers and fusion bonding.
Note that it is part of the five founding members that form MAPC, including SkyeChip, FusionAP, Inari Amertron, Pentamaster, and NSW Automation, to accelerate domestic advanced packaging capabilities, align R&D priorities, and establish sector standards.
“In our view, MAPC’s core value proposition lies in improving roadmap visibility and creating tighter feedback loops between local chip designers, OSATs, and equipment players,” said HLIB, adding that its long-term ambition is for Malaysia to capture ~7% of the global advanced packaging market by 2035.
“We believe the read-through for Malaysian semiconductor players is compelling, but remains contingent on FusionAP achieving commercial-scale execution,” said HLIB.
From a top-down perspective, successful entry into advanced packaging could drive a structural re-rating of the sector, underpinned by higher average selling prices and superior gross margins (~40–50% vs ~15–20% for traditional packaging).
Global Tier-1 OSATs are already showing mix-driven margin expansion,
while leading equipment suppliers have seen significant valuation re-rating as markets ascribed structural growth premiums to their critical role in advanced packaging.
“Overall, we are cautiously optimistic but remain cognisant that MAPC and FusionAP are still in the early stages of execution,” said HLIB.
With the geopolitical situation remaining fluid, HLIB continues to favour a selective approach to the sector, focusing on names with exposure to structural themes (China+1 relocation, equipment supply chain localisation, optical/power semi plays, and Intel resurgence). HLIB’s top picks for the sector are ITMAX, UWC, and Frontken. —Mar 25, 2026
Main image: Sankai
