Malaysia Courts China for Chip Advancement Amidstโข U.S. Trade Concerns
BEIJING – Malaysia isโข actively seeking deeper technological ties with โฃChinaโค as โit strives to elevate its semiconductor industry, a move that โcouldโ invite increased โฃscrutiny from โคthe United States, analysts warn. The push comes as โฃPrime Minister Anwar Ibrahim concludes a four-day official visit to China, โmarked โbyโฃ high-level discussionsโค with leaders inโค the Chinese tech sector on Tuesday.
Anwar stated the meetings focused โon “discuss[ing] and work[ing] on the formula” to expand markets โขfor Malaysian semiconductor โฃexports and bolster local expertise in artificial intelligence technologies. Currently the world’s sixth-largest semiconductor exporter, Malaysia aims to become a leadingโฃ chipmaking nation-on par with South Korea and Taiwan-and increase its annual exports of electrical and electronic products to 1 trillion ringgit (US$238 billion)โ by 2030.
This ambition to collaborate more closely with โChinese firmsโฃ is occurring againstโ a backdrop of heightened U.S. oversightโฃ of Malaysia’s trade practices. Recent reports of Nvidia‘s high-end AI chips being illicitly shipped through Malaysian ports to China prompted the U.S. to increase monitoring. In July, Malaysia’s trade ministry assumed complete control over issuing trade permits for all high-performance AI chipsโฃ originating from the United States.
Geopolitical analyst Oh Ei Sun described Malaysia’s strategy as a “risky gambit.” The contry โis attempting toโค navigate a delicateโค balance: upgrading its tech sector while maintainingโค access toโฃ both the U.S.-theโค world’s largest consumer market-and China,a key partner in its economic development.The deepeningโ relationship with Chinaโ represents a potential pathwayโค toโ overcome limitations in its current chipmaking capabilities, but also carries theโฃ riskโ of further complicating relations with Washington and perhaps triggering additional trade restrictions.