“Malaysia’s Semiconductor Sector to Face Stricter Regulations Amid US Pressure”
According to the Financial Times, Malaysia is set to implement tighter regulations on semiconductors in response to U.S. pressure to prevent the transfer of crucial chips to China for artificial intelligence development. Trade Minister Zafrul Aziz mentioned that the U.S. has requested Malaysia to closely monitor the movement of high-end Nvidia chips entering the country, suspecting that many are being diverted to China instead. Aziz stated, “[The U.S. is] asking us to make sure that we monitor every shipment that comes to Malaysia when it involves Nvidia chips.” The U.S. authorities are concerned about ensuring that the servers end up in their intended data centers and do not get redirected elsewhere.
The investigation is also looking into whether DeepSeek, a company whose AI model gained significant attention in January, has been using prohibited U.S. chips. Malaysia is examining if its local laws were violated in the shipment of servers related to a Singapore fraud case, as these servers may have contained advanced chips subject to U.S. export controls. The case in Singapore involves allegations of fraudulent supply of U.S. servers to Malaysia, with transactions totaling $390 million. Singapore media have connected this case to a potential transfer of Nvidia’s AI chips to the Chinese AI firm DeepSeek. Nvidia has not commented on the situation at this time.
(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Mrigank Dhaniwala)
