Malaysia to tighten semiconductor rules amid US pressure over Nvidia chips – FT

Malaysia to tighten semiconductor rules amid US pressure over Nvidia chips – FT

  • 24.03.2025 03:06
  • investing.com
  • Keywords: AI, Semiconductor

Malaysia is tightening semiconductor regulations amid U.S. pressure to monitor NVIDIA chips, which are suspected of being rerouted to China. A task force has been formed to track chip shipments, following a $390 million fraud case involving Nvidia chips sold via Malaysia to China. The move highlights growing scrutiny over Malaysia's role in the global semiconductor supply chain.

Microsoft ReportsNVDAsentiment_dissatisfiedMSFTsentiment_satisfied
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Estimated market influence

Nvidia

Nvidia

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Nvidia's chips are under U.S. export controls and are suspected of being rerouted to China via Malaysia.

Microsoft Corporation

Microsoft Corporation

Positivesentiment_satisfied
Analyst rating: Strong buy

Microsoft has invested in Malaysia's data center sector, which relies on Nvidia's processors.

ByteDance

Neutralsentiment_neutral
Analyst rating: N/A

ByteDance is a major investor in Malaysia's data centers but its specific role in the semiconductor issue isn't detailed.

Context

Analysis: Malaysia Tightens Semiconductor Rules Amid US Pressure Over Nvidia Chips

  • US Pressure: The U.S. is pressuring Malaysia to monitor high-end NVIDIA chips, fearing they may be rerouted to China in violation of export controls.

  • Malaysian Response: Malaysian Trade Minister Zafrul Aziz confirmed Washington's demand for strict tracking of NVIDIA chips entering the country.

  • Task Force Formation: Malaysia has established a task force to tighten oversight, focusing on the fast-growing data center sector reliant on NVIDIA processors.

  • Fraud Case: A $390 million fraud case in Singapore involved suspected sales of NVIDIA chips to China via Malaysia, prompting U.S. concerns.

  • U.S. Export Controls: The U.S. has imposed strict export controls on AI chips to prevent their use in Chinese military advancements.

  • Investment Impact: Malaysia has attracted over $25 billion in data center investments from companies like Microsoft and ByteDance, making it a key player in the global semiconductor supply chain.

  • Economic Scrutiny: The country faces increased scrutiny, potentially affecting its role in the semiconductor industry and business environment.

  • Industry Implications: Tighter regulations may slow shipments, increase costs, or complicate compliance processes for companies like NVIDIA, Microsoft, and ByteDance operating in Malaysia.

  • Competitive Dynamics: Other countries might fill the gap if Malaysia's regulations become restrictive, shifting global supply chain dynamics.

  • Long-Term Effects: Potential changes include market fragmentation, new trade agreements, and increased investment in local manufacturing or chip capabilities by Malaysia.

  • Strategic Considerations: Malaysia must balance U.S. demands with economic interests, possibly diversifying semiconductor sources to reduce reliance on foreign suppliers.