Penang in particular is a very industrialized town. Many tech companies, from producing finished products to IC design, are located here.
Bosch, Intel, Motorola, Agilent, Siemens, Solectron, Sony, the list goes on.

Overseas companies doing business in Malaysia normally find common incentives such as below:

• Stable environment. Malaysia is one of the most stable and progressive country in ASEAN. With business friendly government and excellent infrastructures such as modern airports and efficient highways.
• Good business practice. WYSIWYG. There is very little hidden cost in doing business with Malaysian company.
• Well trained workers.
• Multilingual. The national language is Bahasa Malaysia. While English and Chinese is widely used in business.
• Good quality control.
• Plenty of Manufacturing resources and cost savings opportunities.