MALAYSIA SET TO STRENGTHEN REGULATIONS ON SEMICONDUCTOR, AI CHIPS EXPORT - REPORT

KUALA LUMPUR, March 24 (Bernama) -- Malaysia plans to strengthen its regulations on the semiconductor sector in response to United States (US) 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 closely track the movement of high-end Nvidia chips into the country amid suspicions that the chips are diverted to China, hence violating US export rules.

“(The US is) asking us to make sure that 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 that servers end up in the data centres that they are supposed to and not suddenly move to another ship,” he said.

The minister also informed that a task force has been set up in collaboration with Digital Minister Gobind Singh Deo to tighten regulations around Malaysia's data centre industry, which mainly rely on chips from global industry leader Nvidia.

Earlier this month, Singapore's authorities charged three men over the alleged fraudulent movement of Nvidia chips and its Law and Home Affairs Minister K Shanmugam has said the servers in the fraud case may have contained Nvidia’s chips which were then sent to Malaysia.

The Malaysian government has approved 21 data centre projects under the Digital Ecosystem Acceleration Scheme with a total 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 percent, or RM11.5 billion, comes from domestic investment.

-- BERNAMA