Malaysia’s Semiconductor Industry Faces Uncertainty Amid Potential US Tariffs
Malaysia’s semiconductor firms express caution amidst potential US tariffs, despite current exemptions. Industry leaders, including Datuk Wong Siew Hai, highlight the possibility of future trade actions affecting both local and American companies based in Malaysia. With strong ties to crucial export figures, the sector waits for developments while the Malaysian government plans negotiations with the US on tariffs.
Malaysia’s semiconductor sector remains cautious despite being exempt from recent US tariffs, with concerns over potential future trade actions. Datuk Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, warned that American semiconductor companies in Malaysia could also be subjected to tariffs. “I do not think it is exempted; it’s just that the tariff has not been announced yet,” he stated.
An executive order by US President Donald Trump imposed a 24% tariff on imports from Malaysia, effective April 9, primarily targeting various goods while exempting semiconductors. Electrical and electronic products constitute approximately 40% of Malaysia’s total exports, and major semiconductor firms including Intel and Infineon Technologies have significant operations in the country.
Wong noted that semiconductors might be indirectly impacted since they are integral components in products subject to tariffs, such as computers and industrial equipment. “If the product is shipped to the US, it will be captured under the equipment tariff,” he explained. Therefore, the industry is left with an uncertain future.
Given the unpredictable nature of the Trump administration, the semiconductor industry is adopting a wait-and-see approach. The tariffs are not yet finalized, and President Trump has expressed openness to discussing them. Additionally, the Malaysian Ministry of Investment, Trade & Industry plans to negotiate with the US regarding these tariffs.
In summary, Malaysia’s semiconductor industry is grappling with uncertainty, having temporarily avoided tariffs but remaining vulnerable to future trade actions from the United States. With key players in the sector expressing concerns, the Malaysian government aims to engage in negotiations, hoping to protect its significant export domain amidst fluctuating trade policies.
Original Source: theedgemalaysia.com
