Malaysia’s Semiconductor Industry Prepares for Potential U.S. Tariffs

Malaysia’s semiconductor companies remain cautious despite being exempt from U.S. tariffs. Future trade actions could still target semiconductors, impacting local firms. The sector contributes significantly to exports and is closely tied to global trade policies. Negotiations with the U.S. government are underway.

As of April 3, Malaysia’s semiconductor sector remains vigilant despite being exempt from the latest tariffs imposed by the United States. Datuk Wong Siew Hai, President of the Malaysia Semiconductor Industry Association, indicated that future trade actions targeting semiconductors could still arise. Additionally, U.S. semiconductor firms operating in Malaysia may also face potential tariffs.

U.S. President Donald Trump recently announced a 24% tariff on imports from Malaysia set to begin on April 9, affecting all trading partners except for semiconductors, which are currently exempt. The electrical and electronics sector makes up approximately 40% of Malaysia’s exports, and major companies like Intel and Infineon Technologies employ thousands in the country.

Wong expressed concerns that semiconductors might be indirectly impacted since they are integrated into products such as computers and industrial machinery, which could be subjected to tariffs. He explained, “If the product is shipped to the US, it will be captured under the equipment tariff.”, highlighting the potential challenges in the industry.

Presently, the industry remains cautious and will adopt a wait-and-see approach due to the unpredictability of U.S. trade policy. Although the tariffs announced are not final, discussions for negotiations on the tariffs are ongoing between Malaysia and the U.S. government.

The Malaysian semiconductor industry faces ongoing challenges despite current tariff exemptions. Experts warn of potential future tariffs on semiconductors and associated products, emphasizing the need for vigilance. The sector is poised for negotiations with the United States, hoping to mitigate any adverse effects from trade policies. Continued monitoring and adaptability will be essential as the situation evolves.

Original Source: theedgemalaysia.com