Malaysia’s Semiconductor Sector Remains Cautious Amid US Tariff Uncertainty

Malaysia’s semiconductor companies, though currently exempt from US tariffs, remain cautious about future trade actions. Industry leaders predict that semiconductors may still face indirect tariff impacts. The Malaysian government plans to negotiate with the US regarding tariffs to safeguard the sector’s interests.

Malaysia’s semiconductor sector remains apprehensive despite being granted exemptions from recent US tariffs. Datuk Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, warns that future US trade actions could still target semiconductors. American companies in Malaysia may also face potential tariffs going forward.

On April 9, a 24% tariff on goods imported from Malaysia will be implemented, impacting various trading partners while leaving semiconductors exempt. Given that electrical and electronic products comprise approximately 40% of Malaysia’s exports, this exemption is crucial for the industry. Notably, significant global firms such as Intel and Infineon Technologies maintain substantial operations in Malaysia, employing thousands.

However, Wong highlights that semiconductors might still be indirectly affected as they are integral components in tarifficated products like computers and industrial machinery. Consequently, “If the product is shipped to the US, it will be captured under the equipment tariff,” he stated, indicating that the sector cannot entirely avoid tariff impacts.

The semiconductor industry is now in a cautious holding pattern as it navigates the unpredictability of US trade policies under President Trump. While the situation remains fluid, negotiations about tariffs could potentially alter future outcomes.

The Malaysian semiconductor industry faces ongoing challenges and uncertainties despite current tariff exemptions. Future US trade actions could jeopardize the sector, impacting both local and American firms in Malaysia. Industry leaders call for caution as the sector braces for potential tariff implications, advocating for ongoing negotiations to mitigate risks associated with US tariffs on related products.

Original Source: theedgemalaysia.com