Malaysia, which commands around 13 percent of the global semiconductor market, is tightening export regulations for advanced chips in response to rising geopolitical tensions and U.S. pressure.
Once a low-cost manufacturing hub in the 1970s, Malaysia’s semiconductor industry exported $37 billion worth of chips in 2024, a significant share of which was destined for China. To curb illicit technology transfers, the Malaysian government has introduced new permit requirements for semiconductor exports, particularly those with AI training capabilities, reflecting its growing role in safeguarding the global tech ecosystem.
Key Highlights
These regulatory changes follow reports that Chinese engineers used Malaysian data centers to train AI models with Nvidia chips, effectively circumventing U.S. export controls.
The move coincides with impending U.S. export restrictions on chip exports to Malaysia and Thailand, over fears that Chinese entities are routing banned chips through Southeast Asia. Malaysia's permit regime is also a response to a thriving black market in China, where Nvidia A100 chips fetch up to $20,000 each due to artificial scarcity.
Despite having 13 Free Industrial Zones and 12 Free Commercial Zones, Malaysia now faces the challenge of balancing economic incentives with geopolitical compliance. Its Dagang Net, the digital customs platform, will need to evolve to monitor non-traditional tech transfers, which don’t show up in basic shipment data.
Also Read: Malaysia's Chip Industry Faces Tax & Trade Pressures
With a national goal of growing its semiconductor market share to 15 percent by 2030, Malaysia is caught in a strategic dilemma—between supporting global trade and adhering to increasingly complex export controls from major powers.
We use cookies to ensure you get the best experience on our website. Read more...
.jpg "Technology in Cancer Care: A story of evolving paradigms")
.jpg "Bringing Shop Floor to Manufacturer's palm: Smart Factory Solutions for tomorrow")
