Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz said Malaysia plans to tighten regulations on semiconductors under pressure from the United States.
The Donald Trump administration has ordered Malaysia to closely monitor the movement of Nvidia chips entering the giant country as it is suspected of giving it an advantage over China and violating US export regulations.
Tengku Zafrul said they have asked the government to monitor every shipment coming into Malaysia, especially Nvidia chip products, and ensure that servers end up in data centres and are not moved elsewhere.
The statement came after the prosecution in Singapore of a firm accused of fraudulently supplying US servers to Malaysia involving a $390 million transaction, with Singapore linking the case to Chinese artificial intelligence (AI) firm DeepSeek.
Singapore has charged three men over the alleged movement of Nvidia chips and Law and Home Affairs Minister K Shanmugam said the servers in the fraudulent case may have contained Nvidia chips that were then sent to Malaysia.
US authorities believe that the Nvidia chips reached China after passing through Malaysia, according to a Financial Times report cited by Zafrul.
However, the Malaysian investigation found no evidence that the chips reached the local data centers where they were allegedly purchased.
Malaysia has largely evaded US trade restrictions imposed by the Biden and Trump administrations, which aimed to block the flow of advanced chips crucial for AI and data centers to China.
