Malaysia’s tech sector could risk further US scrutiny over a plan to deepen ties with Chinese semiconductor firms, as it looks to move up the value chain while maintaining access to the world’s biggest consumer market, according to analysts.
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Prime Minister Anwar Ibrahim, who is currently on a four-day official visit to China, held high-level talks in Beijing on Tuesday with senior leaders in the Chinese tech sector.
Anwar earlier said the meeting aimed to “discuss and work on the formula” to open new markets for Malaysia’s semiconductor exports while strengthening Malaysian talent in artificial intelligence-related technologies.
Currently the world’s sixth-largest exporter of semiconductors, Malaysia has set an ambitious goal of becoming a top-end chipmaking country alongside economies such as South Korea and Taiwan, and growing its total annual exports of electrical and electronic products to 1 trillion ringgit (US$238 billion) by 2030.
The US has stepped up scrutiny of Malaysia’s trade flows following reports of high-end semiconductors made by artificial intelligence chip giant Nvidia being shipped illegally through its ports to China. In response, Malaysia’s trade ministry in July took full control of the issuance of trade permits for all high-performance AI chips sourced from the US.
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Malaysia’s intention to deepen cooperation with Chinese tech companies was a risky gambit, said Oh Ei Sun, a geopolitical analyst.