KUALA LUMPUR – Washington’s move to ease chip export restrictions could further cement Malaysia’s position as the world’s sixth-largest semiconductor exporter, while also strengthening the country’s appeal as a hub for data centres.
This means Malaysia could have better access to more advanced semiconductor chips potentially opening the door for local players to move beyond packaging and testing, into higher-value chip design and manufacturing.
“Enhanced chip performance would also strengthen Malaysia’s capabilities in data centres, which already benefit from a cost-effective and resource-friendly environment,” said lawyer Chris Tan to Bernama.
“Trump’s new approach would require negotiations on a country-to-country basis, (and) his preference is for a deal eventually,” Tan said, referring to reports that the Trump administration plans to revise a Biden-era rule restricting AI chip exports.
“This is very much like his move to impose tariffs, which has drawn everyone to his table and not through a clear set of defined rules on sharing US artificial intelligence (AI) technological advancement.”
The current restrictions were aimed at limiting China’s access to advanced chips, while keeping them within the US and its allies.
Bank Muamalat chief economist Mohd Afzanizam Abdul Rashid said the goal to control who gets access to US-made AI chips remains unchanged, but the method may now shift.
“The focus now lies on how it will be implemented, as the current rulings (by Biden) are seen as cumbersome,” he said.
He pointed to Malaysia’s recent work with UK-based ARM Holdings on chip licensing as a sign of progress.
“The government has been proactively managing the industry landscape quite well. The case in point would be the collaboration with ARM Holdings Plc for semiconductor-related licenses and know-how,” he said, adding that such partnerships could speed up local chip production, Bernama reported.
Still, questions remain over whether Malaysia is doing enough to reduce its reliance on foreign tech.
Malaysia’s strong presence in outsourced semiconductor assembly and testing is well known, but Mohd Afzanizam said more support is needed to help existing players scale up.
Meanwhile, Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai stressed the need for local companies to stay competitive while also complying with export restrictions.
“Malaysia must safeguard technology, and companies must comply with all restriction requirements,” he said.
He added: “We must be both competitive and compliant to strengthen our global leadership and reinforce our position as a trusted semiconductor hub.” – May 12, 2025