Malaysia Courts China for Chip Advancement Amidst U.S. Trade Concerns
BEIJING – Malaysia is actively seeking deeper technological ties with China as it strives to elevate its semiconductor industry, a move that could invite increased scrutiny from the United States, analysts warn. The push comes as Prime Minister Anwar Ibrahim concludes a four-day official visit to China, marked by high-level discussions with leaders in the Chinese tech sector on Tuesday.
Anwar stated the meetings focused on “discuss[ing] and work[ing] on the formula” to expand markets for Malaysian semiconductor exports and bolster local expertise in artificial intelligence technologies. Currently the world’s sixth-largest semiconductor exporter, Malaysia aims to become a leading 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) by 2030.
This ambition to collaborate more closely with Chinese firms is occurring against a backdrop of heightened U.S. oversight 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 chips originating from the United States.
Geopolitical analyst Oh Ei Sun described Malaysia’s strategy as a “risky gambit.” The contry is attempting to navigate a delicate balance: upgrading its tech sector while maintaining access to both the U.S.-the world’s largest consumer market-and China,a key partner in its economic development.The deepening relationship with China represents a potential pathway to overcome limitations in its current chipmaking capabilities, but also carries the risk of further complicating relations with Washington and perhaps triggering additional trade restrictions.