Malaysian Chip Firms Pause Expansion Amid US Tariff Uncertainty

Malaysia's semiconductor industry faces mounting pressure as firms halt growth plans pending clarity on US tariff exemptions. The Malaysia Semiconductor Industry Association warns that investment decisions hang in the balance ahead of the August 1 deadline, when temporary 10% levies could revert to 24%.

President Wong Siew Hai emphasized the sector's pivotal role - Malaysia handles nearly 10% of global chip packaging and generates $135 billion annually from semiconductor exports. "Everyone is waiting to see how it all plays out," Wong noted, suggesting AI and automation investments will prove crucial for maintaining competitiveness.

The nation's ambitious 2030 export target of $282 billion now confronts potential 25% sector-wide tariffs proposed by the TRUMP administration. This comes despite Malaysia's recent 25 billion ringgit ($5.9 billion) commitment to semiconductor industry growth.