Malaysia is in talks with semiconductor firms, including U.S. giants Intel (NASDAQ: INTC) and GlobalFoundries (NASDAQ: GFS), on mitigating the impact of potential U.S. tariffs. Trade Minister Tengku Zafrul Aziz stated that the government is assessing whether consumers or companies will absorb the increased costs.
President Donald Trump previously signaled plans for tariffs of 25% or higher on semiconductor imports, though the timeline remains uncertain. With Malaysia supplying $16.2 billion worth of chips to the U.S. last year—nearly 20% of total U.S. semiconductor imports—the country’s export-driven economy could face challenges.
While no financial support measures have been announced, the government is monitoring tariff implications closely. Despite concerns, Malaysia's growing data center sector, backed by Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Oracle (NYSE: ORCL), remains resilient.
New U.S. restrictions set to take effect in May will limit AI computing power deployment outside the U.S., capping it at 50%, with only 7% allocated to countries like Malaysia. However, Tengku Zafrul assured that the restrictions won’t hinder Malaysia’s booming data center industry, as major U.S. firms continue investing in the region.
AI-driven demand is expected to sustain growth, with companies confident that the new regulations allow sufficient capacity. As Malaysia strengthens its position as a key semiconductor and AI hub in Southeast Asia, the government remains focused on balancing trade risks and opportunities in the evolving tech landscape.