PETALING JAYA: Malaysian companies building data centres must adhere to strict US compliance standards.
Otherwise, they risk being affected by proposed broad-brush US policies aimed at non-compliant entities, say interest groups.
But more clarity from the United States is necessary on its latest three-tiered restrictions on advanced chip exports, they added.
Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said chipmakers such as Nvidia, IBM and Intel, which supply essential chips for data centres, already adhere to US regulations.
“These companies conduct rigorous due diligence. It’s unfair to generalise about non-compliance when Malaysian firms meet all requirements,” he said.
“We need clearer definitions from the Biden administration. Our companies adhere to US restrictions and Nvidia’s standards, otherwise, they would face penalties or shipment bans.”
Wong also cautioned the broader economic implications of these restrictions, which could negatively impact US companies by affecting their sales, jobs, profits and ability to innovate.
He also said affected countries could find alternative sources or develop their own technology.
Socio-Economic Research Centre executive director Lee Heng Guie said the restrictions could dampen investor sentiment just as Malaysia positions itself as a data centre powerhouse.
He said the move was believed to have been crafted to prevent trade circumvention, where firms would reroute through third parties to avoid tariffs amid the ongoing US-China trade war, likely to escalate under president-elect Donald Trump.
“The Malaysian government needs to seek further clarification from the United States on these restrictions, which place Malaysia in the second category with limited data centre capacity,” he said.
Lee also warned that the restrictions might backfire, noting that US tech giants have committed billions in data centre investments in Malaysia.
“The United States must reconsider the implications of these restrictions, which threaten to severely impede the development of AI,” he added.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expressed scepticism about the effectiveness of the export restrictions, highlighting potential unintended consequences.
“I am not sure how this policy can benefit the US economy.”
Asian economies, he added, are unlikely to remain passive in response to these restrictions.
“Take Huawei, for instance. After being severely cut off from US technologies in 2019, they developed their own operating system, HarmonyOS, in the same year,” he said.
This situation, said Mohd Afzanizam, could push countries to reconsider their chip procurement strategies, potentially leading to greater integration with non-US technology providers.
Tunku Abdul Rahman University of Management and Technology’s Centre for Business and Policy Research chairman Dr Foo Lee Peng said the restrictions could slow innovation and limit growth in sectors such as banking, finance and semiconductors.
She said this could potentially delay Malaysia’s ambitions to become a global data centre hub and AI powerhouse.
However, she said Malaysia has secured substantial investments in technology and digital sectors, which may mitigate the impact.
“For instance, Google, Oracle and Nvidia have all announced data centre and cloud investment projects worth billions in Malaysia.
“These investments underscore Malaysia’s strong ties with American technology firms and its resilience in facing global challenges,” she said.
Foo noted that Malaysia’s strategic role in the semiconductor supply chain should shield it from major disruptions, despite shifts in trade dynamics due to AI technology reliance.
“Malaysia’s exports of electrical and electronics products remain strong, along with initiatives like ‘Made in Malaysia’ graphic processing unit (GPU) chips that will bolster local capabilities and attract investments,” she said.
While some countries may face challenges due to limited access to advanced chips, Foo said Malaysia’s leadership in Asean offers an opportunity to drive regional collaboration.
Recently, the US announced new restrictions on AI chip exports under outgoing President Joe Biden, aimed at preventing technology access by adversarial countries.
The proposed regulation includes a 120-day comment period to allow the incoming Trump administration to have the final say on the restrictions.
