I can highly recommend Deepee's Tailor in the Straits Quay shopping center. After reading some positive reviews of his work on this forum I had a suit and shirt made when I was in Penang in January.
I was only in town for a few days so the finished product was mailed to me. The suit fits great! The work is on par with my tailor in Hong Kong, for about half the price.
If you're looking for a tailor in Penang, go see Deepee!