Malaysia now requires mandatory trade permits for all high-performance artificial-intelligence (AI) chips originating from the United States, effective immediately. The move comes as the country seeks to manage escalating trade tensions with Washington and prevent potential misuse of its jurisdiction in global semiconductor supply chains.
The Ministry of Investment, Trade and Industry (MITI) said the new requirement applies to exports, transshipments, and transits of such chips, citing national security and trade compliance concerns. Stakeholders must now notify Malaysian authorities at least 30 days in advance if the AI chips involved are not already listed under Malaysia’s Strategic Items List (SIL), which governs goods with potential military applications.
“This initiative serves to close regulatory gaps while Malaysia undertakes further review on the inclusion of high-performance AI chips of U.S. origin into the SIL,” MITI stated.
The measure follows U.S. President Donald Trump’s recent imposition of a 25% tariff on Malaysian goods, effective August 1, as part of efforts to reduce what he called “unsustainable trade deficits.” It also reflects Kuala Lumpur’s response to reports that Chinese entities may have bypassed U.S. export controls by utilizing Malaysian facilities for AI development.
In March, Malaysia faced pressure from Washington to enhance oversight of semiconductor shipments after reports emerged that advanced Nvidia chips had reached China via Singapore and Malaysia. Last month, Malaysian authorities launched an investigation into claims that four Chinese engineers arrived in Kuala Lumpur carrying hard drives loaded with 80 terabytes of data. The engineers reportedly trained an AI model in Malaysian data centers using 300 Nvidia-powered servers before returning to China with the results.
MITI pledged strict legal action against any individual or entity found violating export controls or engaging in illicit trade. It also warned that companies operating in Malaysia must adhere to international trade obligations to avoid triggering secondary sanctions.
“MITI remains committed to preserving a safe, secure, transparent, and rules-based trading environment with all its trade partners, and will not tolerate the misuse of Malaysia’s jurisdiction for illicit trading activities,” the ministry said.
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