Penang chip startup FusionAP raises US$2M pre-seed led by Vertex, Southern Capital

Penang-based FusionAP Sdn Bhd has closed a US$2 million (RM8 million) pre-seed round co-led by Vertex Ventures Southeast Asia & India and Southern Capital Group, with the chip packaging startup saying the capital will fund engineering, R&D and pilot production for advanced 2.5D and 3D AI chip packaging. The round closed on 13 May 2026, according to TechNode Global, and is one of the early pre-seed checks Vertex has written into Malaysia's deeptech pipeline this year. Founders Teng Chow Ooi and Peter Chavart — both former Intel and TSMC engineers — are positioning FusionAP as a geopolitically neutral advanced-packaging platform for global chipmakers.

The deal

The US$2 million (RM8 million) pre-seed is split evenly between two co-leads: Vertex Ventures Southeast Asia & India, the Singapore-headquartered early-stage arm of Vertex Holdings, and Southern Capital Group, a Southeast Asia–focused deeptech investor. The funding is earmarked for engineering hires, process integration build-out, R&D, intellectual property development, and pilot production capacity for FusionAP's 2.5D and 3D advanced packaging platform.

The startup is also lined up for a matching research grant from the Malaysia Science Endowment, which sits under the Ministry of Science, Technology and Innovation (MOSTI). That effectively doubles the usable capital for an early-stage company whose first cheque is going into equipment, clean-room tooling and process engineering rather than software or sales.

FusionAP is registered in Penang — at the NCER Technology Innovation Centre (NTIC) in Bayan Lepas Industrial Park, Phase 4 — and is building what it describes as the country's first homegrown advanced packaging OSAT (outsourced semiconductor assembly and test) platform, with 2.5D and 3D chip-stacking capability. Vertex, in its own commentary, framed advanced packaging as "both the critical bottleneck and the critical enabler in next-generation semiconductor performance."

Why this matters

The headline number is small for a semiconductor company — US$2 million at pre-seed is roughly the cost of one piece of advanced packaging equipment. But the deal's signal value is much larger because it pulls together three threads Malaysian investors have been watching separately.

First, the sector. AI compute is moving from GPU-centric to package-centric: NVIDIA's H100 and H200, AMD's MI300, and the major hyperscaler custom-silicon programmes all rely on advanced packaging — chip-on-wafer-on-substrate, 2.5D interposers, 3D stacked memory — as the primary lever for performance and cost. The bottleneck is now in OSAT capacity, and the dominant OSAT players are Taiwan- and Korea-based. A Malaysian OSAT, building a geopolitically neutral alternative, is a slot the global supply chain is actively trying to fill.

Second, the founders. Teng Chow Ooi and Peter Chavart are not first-time operators. The Intel and TSMC alumni pedigree is the kind of background that gets Malaysian deeptech founders past the first technical due-diligence call with foreign strategic investors, which is the gate Vertex uses to filter its early-stage funnel. (Deeptech founders building the operations layer — the process dashboards and pilot-line reporting that make a fab auditable to a global chip buyer — increasingly need that infrastructure in place before the seed round, not after.)

Third, the public funding. The MOSTI matching research grant is a non-dilutive doubling of the cheque, but it also comes with reporting milestones that push the team toward the kind of governance Malaysian institutional investors expect. The deal is a clean template for what a 2026 Malaysian deeptech pre-seed looks like: a US$2M venture round, an RM-equivalent matching government grant, a Penang/Selangor base, and a path into the country's National Semiconductor Strategy. (Founders structuring the round typically map the build-side work into a four-quarter plan so the matching grant, the venture tranche, and the pilot-line commissioning land on a single delivery schedule.)

For Malaysian investors, the practical question is what the next round will look like. Vertex's pattern in the region — FusionAP, GreatAsic Technology, SkyeChip — is to lead pre-seed, then write a much larger follow-on cheque at Series A once a pilot line is operational and a customer LOI is in hand. Expect FusionAP's next round to be in the US$10-25M range within 12 to 18 months, conditional on a customer anchor and a working pilot line in Penang.

What's next

FusionAP is one of 10 companies selected for the inaugural SemiconStart Malaysia cohort, which launched on 1 July 2026 under MTDC in collaboration with Silicon Catalyst UK. Each selected company can receive up to RM1 million in incubation support over the 260-day programme, with a further RM10 million allocated for the acceleration phase. The cohort spans IC design, advanced materials, advanced packaging, RF and photonic systems.

The MOSTI research grant is the next scheduled milestone. If the matching grant is approved in Q3 2026, expect an announcement from the company on pilot-capacity commissioning and the first customer LOI — most likely a US- or Taiwan-based AI chip designer looking for a non-Taiwan OSAT option. Investors watching the Malaysian semiconductor pipeline should track FusionAP alongside GreatAsic (which closed its own US$6.9M Pre-Series A from Vertex on 10 June 2026) and SkyeChip (which listed on Bursa Malaysia's ACE Market in May 2026 with a RM352 million IPO).

Source: TechNode Global — Malaysia's semiconductor firm FusionAP raises $2M to expand advanced semiconductor packaging