US Raises Concerns with Malaysia Over Nvidia Chip Exports to China
25 March 2025 路 Uncategorized 路
Source: 路 https://technews.tw/2025/03/24/malaysia-investigates-possible-nvidia-chips-being-shipped-to-china/
Malaysia plans to strengthen semiconductor oversight under pressure from the United States, aiming to prevent illegal AI chips from entering China.
According to the Financial Times, Malaysian Trade Minister Tengku Zafrul Aziz stated that American authorities have requested close tracking of high-end NVIDIA chips shipped to Malaysia due to concerns they are being diverted into China in violation of US export regulations. To address this issue, a task force has been established with the Digital Ministry to enhance regulation over the rapidly expanding data center industry, which currently relies heavily on NVIDIA鈥檚 chips.
Minister Aziz noted that the United States is demanding monitoring of every batch of NVIDIA chips shipped to Malaysia and verification that their final destination is a legitimate data center rather than being rerouted elsewhere. These US export controls target advanced semiconductors and related equipment, aiming to hinder China's development of next-generation technologies with potential military applications like AI.
Recently, Singapore accused three men transiting through Malaysia of illegally selling NVIDIA chips to China in transactions totaling $390 million. Introduced during the final days of former President Biden鈥檚 administration, export control measures established a tiered permit system for data center AI chips designed to prevent Chinese companies from acquiring them via third countries.
NVIDIA's Singapore office accounts for nearly one-quarter of global sales, prompting suspicions in Washington about potential leakage into China due to almost all transactions being invoiced internationally through the city-state. Three weeks ago, a surprise police operation involving raids at 22 locations resulted in nine arrests and three indictments on charges related to fraudulent server sales containing NVIDIA chips.
While US authorities suspect an illegal flow of NVIDIA chips via Malaysia into China, no evidence has yet been found indicating these chips entered Malaysian data centers. Southern Johor state is experiencing rapid growth as a market for data centers, attracting over $25 billion in investments from companies like NVIDIA, Microsoft, and ByteDance within 18 months.
The Ministry of Commerce stated that the United States is exerting significant pressure on Malaysia to ensure goods reach their intended destinations; however, enforcement presents considerable challenges despite its apparent simplicity.
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According to the Financial Times, Malaysian Trade Minister Tengku Zafrul Aziz stated that American authorities have requested close tracking of high-end NVIDIA chips shipped to Malaysia due to concerns they are being diverted into China in violation of US export regulations. To address this issue, a task force has been established with the Digital Ministry to enhance regulation over the rapidly expanding data center industry, which currently relies heavily on NVIDIA鈥檚 chips.
Minister Aziz noted that the United States is demanding monitoring of every batch of NVIDIA chips shipped to Malaysia and verification that their final destination is a legitimate data center rather than being rerouted elsewhere. These US export controls target advanced semiconductors and related equipment, aiming to hinder China's development of next-generation technologies with potential military applications like AI.
Recently, Singapore accused three men transiting through Malaysia of illegally selling NVIDIA chips to China in transactions totaling $390 million. Introduced during the final days of former President Biden鈥檚 administration, export control measures established a tiered permit system for data center AI chips designed to prevent Chinese companies from acquiring them via third countries.
NVIDIA's Singapore office accounts for nearly one-quarter of global sales, prompting suspicions in Washington about potential leakage into China due to almost all transactions being invoiced internationally through the city-state. Three weeks ago, a surprise police operation involving raids at 22 locations resulted in nine arrests and three indictments on charges related to fraudulent server sales containing NVIDIA chips.
While US authorities suspect an illegal flow of NVIDIA chips via Malaysia into China, no evidence has yet been found indicating these chips entered Malaysian data centers. Southern Johor state is experiencing rapid growth as a market for data centers, attracting over $25 billion in investments from companies like NVIDIA, Microsoft, and ByteDance within 18 months.
The Ministry of Commerce stated that the United States is exerting significant pressure on Malaysia to ensure goods reach their intended destinations; however, enforcement presents considerable challenges despite its apparent simplicity.
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