Malaysia’s Semiconductor Sector Faces Uncertain Future Amid US Trade Tariff Risks

Malaysia’s semiconductor firms are cautiously optimistic despite being exempt from recent US tariffs. Industry leaders warn of future tariff risks and potential indirect impacts on semiconductors. As negotiations with the US commence, the sector must remain alert to changes in trade policies.

The semiconductor sector in Malaysia continues to face uncertainties despite being exempt from recent US tariffs. Datuk Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, warns that future actions by the US government could still target semiconductors. He expressed concern that American semiconductor companies in Malaysia could face similar tariff threats.

President Donald Trump recently declared a 24% tariff on various goods from Malaysia, set to begin on April 9. Although semiconductors are currently exempt, they might still be indirectly affected as they are integral to other tariffed products, such as computers and industrial equipment, noted Wong.

The electrical and electronic sectors represent approximately 40% of Malaysia’s total exports, and the nation hosts key semiconductor companies, including Intel from the US and Germany’s Infineon Technologies. Wong emphasized that products dispatched to the US could still incur tariffs under equipment classifications, suggesting that the industry must remain vigilant.

Given the volatile landscape of the Trump administration, the industry intends to adopt a “wait and see” approach. Meanwhile, negotiations regarding the tariffs are anticipated, as the Ministry of Investment, Trade & Industry has indicated a commitment to engage with the US government on these issues.

In summary, Malaysia’s semiconductor industry remains poised amidst potential future US tariff actions despite current exemptions. The interconnectedness of semiconductors with other traded goods remains a concern, prompting industry leaders to anticipate and prepare for evolving trade dynamics. The outcome of negotiations between Malaysia and the US could significantly influence the sector’s stability and growth.

Original Source: theedgemalaysia.com