KUALA LUMPUR, March 24 — Malaysia plans to strengthen its regulations on the semiconductor sector in response to United States pressure to curb the illicit flow of advanced artificial intelligence (AI) chips to China, according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
According to a Financial Times report, the minister said the US government has asked Malaysia to track the movement of high-end Nvidia chips into the country amid suspicions the chips are diverted to China, hence violating US export rules.
“(The US is) asking us to make sure we monitor every shipment that comes to Malaysia when it involves Nvidia chips,” Tengku Zafrul was quoted as saying.
“They want us to make sure the servers end up at data centres they are supposed to, not suddenly move to another ship,” he added.
The minister also said a task force was set up in collaboration with Digital Minister Gobind Singh Deo to tighten regulations around Malaysia’s data centre industry, which relies on chips from global industry leader Nvidia.
Earlier this month, Singaporean authorities charged three men over the alleged fraudulent movement of Nvidia chips. Singapore Law and Home Minister K. Shanmugam said servers in the case may have contained Nvidia’s chips, which were then sent to Malaysia.
Malaysia has approved 21 data centre projects under the Digital Ecosystem Acceleration Scheme, with an investment of RM113.8 billion since 2021.
Foreign investment is the main contributor to data centre investment, accounting for 90 per cent of the total investment, or RM102.3 billion, while the remaining 10 per cent, or RM11.5 billion, comes from domestic players.
— Bernama
