By Liz Lee

KUALA LUMPUR (Reuters) – Intel Corp (NASDAQ) to invest $7B in a Malaysian chip-packaging, testing and manufacturing plant, chief executive Pat Gelsinger announced on Thursday. The move is part of a larger effort to expand production due the global shortage in semiconductors.

He stated that production of the advanced packaging facility for Malaysia will begin in 2024.

Malaysian officials stated that the 30 billion ringgit investment ($7.10 trillion) will create more than 4,500 Intel jobs, and more then 5,000 construction jobs.

The United States and Malaysia announced last month that they would sign an agreement in early 2012 to improve transparency, resilience, and security within the supply chain for semiconductors and other manufacturing sectors.

The global shortage of semiconductor chip, partly caused by an epidemic-fueled demand for electronics and disruptions to supply chains, has led carmakers to cut production and delayed smartphone delivery at companies like Apple Inc (NASDAQ).

Malaysia’s chip industry accounts for over a tenth in a worldwide trade of more than $20 billion. It has warned that there will be shortages for at least two year.

In a statement, Mohamed Azmin Ali, Malaysian Minister for International Trade and Industry said that “this undertaking is indeed timely due to the bullish global demand fueled by chip shortages and potential challenges arising out of the recovery of the pandemic worldwide.”

Intel’s first factory outside of the United States was opened in Penang on a 5 acre plot in 1972. According to its website, the facility had more than 1,000 workers and became a critical part of the company’s manufacturing process.