Malaysia to Strengthen Semiconductor Rules Amid US Pressure

As the United States pressures Malaysia to stop the flow of chips essential to the development of Artificial Intelligence (AI) to China, Malaysia intends to strengthen its semiconductor rules, according to the sources.

The US government is requesting that Malaysia closely monitor the flow of expensive Nvidia chips that enter the nation due to concerns that many of them are going to China, according to Trade Minister Zafrul Aziz.

"(The US is) asking us to make sure that we monitor every shipment that comes to Malaysia when it involves Nvidia chips,” Aziz said.

"They want us to make sure that servers end up in the data centres that they're supposed to and not suddenly move to another ship."

The US is looking into whether DeepSeek, whose AI model's performance stunned the IT community in January, has been using US chips that are prohibited. Because the computers may have contained sophisticated chips susceptible to US export regulations, Malaysia is currently looking into whether local laws were broken in the transfer of servers connected to a Singapore fraud case.

Earlier in March, Singapore prosecutors told a court that US$390 million in transactions are involved in the case against Singapore-based companies suspected of defrauding Malaysia by supplying US servers.