AsianFin -- Malaysia is set to tighten its regulations on semiconductors as it faces increasing pressure from the United States to curb the flow of advanced chips to China, particularly those critical for artificial intelligence (AI) development, according to a report by the Financial Times on Sunday.
Trade Minister Zafrul Aziz revealed that the U.S. government has urged Malaysia to closely monitor the movement of high-end Nvidia chips entering the country, amid concerns that many are being diverted to China.
"[The U.S. is] asking us to make sure that we monitor every shipment that comes to Malaysia when it involves Nvidia chips," Aziz told the Financial Times. "They want us to make sure that servers end up in the data centers they're supposed to and not suddenly move to another ship."
Nvidia has not yet responded to a Reuters request for comment on the matter.
The U.S. is also investigating whether DeepSeek, an AI company whose model's performance made waves in the tech world earlier this year, has been using banned U.S. chips. This scrutiny reflects broader U.S. efforts to prevent advanced semiconductor technology from reaching China, as part of its strategy to limit China's progress in AI and other high-tech sectors.
Malaysia, a key player in the global semiconductor supply chain, is now caught in the crossfire of U.S.-China tech tensions. The proposed regulatory changes highlight the growing geopolitical complexities surrounding the semiconductor industry and the challenges faced by countries balancing economic interests with international pressures.
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