Kuala lumpur: The US must tread carefully before imposing blanket tariffs on Malaysia’s semiconductor exports, which could disrupt global chip supply and impact American industries, according to the US-ASEAN Business Council.
According to BERNAMA News Agency, Marc Mealy, the council’s executive vice president, warned that debilitating tariffs could affect Malaysia, a key supplier of crucial semiconductor auto chips globally, including to American automakers. “There is data that shows a significant number of those chips that end up in the US market have passed through Malaysia,” Mealy stated. He highlighted that Malaysia was responsible for exporting up to 15 percent of semiconductor chips to the US, consumed predominantly by the American automotive sector.
Mealy cautioned that imposing tariffs on semiconductor exports from Malaysia to the US could trigger ripple effects across global supply chains and disrupt manufacturing processes. Last year, Malaysia’s semiconductors and integrated circuits exports to the US amounted to approximately RM52.11 billion. Many of these exports are manufactured by American companies operating within Malaysia, such as Intel, Broadcom, and Micron.
The American Enterprise Institute, a Washington-based think-tank on government, politics, economics, and social welfare, reported that the US imported about US$40 billion worth of chips in 2024. These imports mainly came from Taiwan, Malaysia, Israel, South Korea, Ireland, Vietnam, Costa Rica, Mexico, and China. While the US government is considering sectoral tariffs, Mealy pointed out that imposing blanket tariffs on chips from Malaysia could have significant consequences.
“Malaysia is a global player in supply chains for chips,” Mealy remarked. He explained that imposing high taxes on chip imports could lead many importers to stop purchasing them, which would affect the manufacturing of vehicles and electronics, making them unavailable in the marketplace. Mealy also noted that Malaysia is a major location for testing, assembly, and packaging of chips, with global supply chains passing through the country before reaching the rest of the world.
Given these considerations, Mealy emphasized that the US administration should carefully deliberate before imposing tariffs on chips or should consider a strategic plan or selective approach. “It shows that they recognize Malaysia has a major role to play in that particular industry. You cannot just put 100 percent tariffs on all chips from Malaysia because you would probably disrupt the marketplace, both here and in America,” he added.
Last August, US President Donald Trump warned of potential tariffs of up to 300 percent on imported semiconductors, but indicated that companies already manufacturing or planning to manufacture chips in the US would be spared.