Malaysia Tightens Controls on U.S.-Origin AI Chip Exports with Mandatory Trade Permits

Malaysia’s Ministry of Investment, Trade and Industry has announced that all exports, transshipments, and transit activities involving high-performance artificial intelligence (AI) chips originating from the United States will now require a trade permit. The regulation takes effect immediately and applies to individuals and companies, who must notify authorities at least 30 days in advance, even if the item is not listed among Malaysia’s strategic goods.

The move aims to close regulatory loopholes as Malaysia considers formally adding such chips to its list of strategic items. In an official statement, the ministry emphasized its commitment to preventing the misuse of its trade routes for unauthorized exports or illicit trading involving sensitive technologies. It warned that violators would face strict legal consequences under Malaysian law.

This regulatory tightening comes amid growing global scrutiny over the movement of advanced semiconductors, particularly those used in AI development. The United States has been urging allies and trade partners, including Malaysia, to restrict the re-export of U.S.-made chips to China due to national security concerns. These chips play a pivotal role in powering next-generation technologies such as generative AI and supercomputing.

Malaysia’s new rules reflect its strategic position in the global semiconductor supply chain and its balancing act between major powers. In March, The Financial Times reported that Malaysia was facing U.S. pressure to prevent sensitive chips from reaching China. The country is now stepping up enforcement to ensure compliance with international standards and geopolitical expectations.

The ministry is also reviewing a separate case involving the shipment of servers linked to a Singaporean fraud case, which may have included advanced chips subject to U.S. export controls. This incident further illustrates Malaysia’s increasing vigilance in preventing the misuse of its territory for bypassing global chip restrictions. Authorities are currently investigating potential breaches of local export laws related to the case.

Source: Reuters