Malaysia’s semiconductor industry has called for strict monitoring of chip movements throughout the supply chain, including those extending beyond its borders, as the US pushes for tighter regulations on the suspected diversion of sanctioned high-end chip shipments to China through the Southeast Asian nation.
Authorities in Singapore and the US are investigating claims that advanced chips from Silicon Valley giant Nvidia were fraudulently moved to China. The chips reportedly came from US$390 million worth of servers sent to Malaysia, potentially violating US sanctions on China’s access to high-end chips for artificial intelligence (AI) development.
Malaysia’s Trade Minister Tengku Zafrul Abdul Aziz said on Sunday that the government planned to tighten regulations to closely track semiconductor shipments, in response to US pressure.
A senior industry representative said tightening regulations was a “must do” if Malaysia hoped to placate US concerns, but added that it had to apply to the entire chain.
“The [production] system is far more complex than just building [servers] in Singapore or Malaysia. The flow can start all the way in other countries,” said Wong Siew Hai, president of the Malaysian Semiconductor Industry Association.
“It is not just about building a server. It must cover the whole process flow, from the time you receive the chips to building the server and shipping it out. All of it has to follow the same tight control.”