Malaysia discusses potential U.S. chip tariffs impact with companies

Malaysia is evaluating the potential impact of U.S. tariffs on semiconductors, with Trade Minister Tengku Zafrul Aziz discussing whether costs will be absorbed by consumers or companies. The country, home to major semiconductor manufacturers like Intel and GlobalFoundries, exported $16.2 billion worth of chips to the U.S. last year, representing nearly 20% of U.S. semiconductor imports. As part of its strategy to enhance its semiconductor industry, Malaysia has signed a $250 million deal with Arm Holdings to acquire advanced chip design blueprints and train local engineers, aiming to transition from assembly to higher-value semiconductor design. However, challenges remain, including retaining skilled talent amid competition for higher salaries abroad. Concerns about U.S. tariffs could hinder Malaysia's ambitions to attract $115 billion in investments by 2030, particularly affecting its booming semiconductor sector in regions like Penang. The agreement with Arm positions Malaysia as a key player in the semiconductor supply chain in Southeast Asia, attracting more foreign investment amidst geopolitical tensions.