Tuesday, 24 June 2025
27.9 C
Singapore
28.2 C
Thailand
19.9 C
Indonesia
27.3 C
Philippines

Chinese firms opt for Malaysia to assemble advanced chips

Chinese semiconductor companies increasingly choose Malaysia for GPU assembly, leveraging the country's strategic location and advanced technology to mitigate US-China geopolitical risks.

Several Chinese semiconductor design companies are increasingly turning to Malaysian firms to assemble parts of their high-end chips. This move aims to mitigate potential risks should the US intensify sanctions on China’s chip industry. Sources reveal these companies specifically request the assembly of graphics processing units (GPUs) in Malaysia. However, the process only involves assembly, not wafer fabrication, ensuring compliance with US regulations. Some agreements have already been reached, although the names of the companies remain confidential.

Nvidia tailors chips for China market

Chinese firms face challenges in obtaining advanced packaging services as the US tightens controls on high-end GPUs, which are pivotal in artificial intelligence, supercomputing, and military applications. This packaging is crucial for enhancing chip performance and is gaining prominence in the semiconductor sector. While not yet restricted by US export controls, there is concern that this technology might eventually be targeted. Malaysia, a key player in the semiconductor supply chain, offers a strategic location for Chinese firms looking to diversify their assembly operations outside of China.

Malaysia: A favourable destination

Malaysian companies like Unisem, with significant Chinese ownership, have experienced a surge in business from Chinese clients. John Chia, Chairman of Unisem, highlights that trade sanctions and supply chain issues have led Chinese chip designers to seek alternative supply sources in Malaysia. The country’s amicable relations with China, cost-effectiveness, skilled workforce, and advanced technology make it an attractive option for these firms. Chia assures Unisem’s operations are legitimate and fully compliant with regulations, with most Malaysian customers being American companies.

Global impact and expansion plans

Malaysia currently holds 13% of the global market share in semiconductor packaging, testing, and assembly, with ambitions to increase this to 15% by 2030. Chinese firms like Xfusion and StarFive are expanding their presence in Malaysia with significant investments in GPU server manufacturing and design centres. The country has also attracted major investments from global players like Germany’s Infineon and US-based Intel. Beyond Malaysia, other nations like Vietnam and India are also vying to expand their chip manufacturing services, appealing to companies looking to mitigate geopolitical risks between the US and China.

Hot this week

Adobe launches LLM Optimizer as AI replaces search engines in content discovery

Adobe unveils LLM Optimizer to help brands appear in AI chats like ChatGPT as AI becomes the new way people discover and shop.

NTT DATA report reveals disconnect among C-Suite leaders over GenAI adoption

NTT DATA report reveals executive misalignment on GenAI adoption, with CEOs optimistic and CISOs warning of risk and readiness gaps.

Vivo X200 FE set to launch in Taiwan on June 23 with stylish colour options

Vivo X200 FE launches in Taiwan on June 23. It is a smartphone in pastel colours, with a ZEISS camera and AI features aimed at younger users.

VPNs linked to the Chinese military are still on app stores two months after the discovery

Dangerous VPNs tied to China's military remain on app stores, raising ongoing privacy concerns for users even two months after initial warnings.

Trump extends TikTok deadline again, raising legal and political concerns

Trump gives TikTok another 90-day extension to split from ByteDance, raising legal doubts and pressure from lawmakers on both sides.

How Asia’s innovation is reshaping the global economy

Asia is becoming a global innovation powerhouse, driving sustainable growth through AI, clean energy, and deep tech ecosystems.

Adobe launches LLM Optimizer as AI replaces search engines in content discovery

Adobe unveils LLM Optimizer to help brands appear in AI chats like ChatGPT as AI becomes the new way people discover and shop.

Rising Chinese PC brand iSoftStone is on track to overtake Apple and HP

Due to fast growth in the education and gaming sectors, Chinese PC maker iSoftStone is set to overtake Apple and HP in China.

The Blood of Dawnwalker lets you step into a dark, vampire-filled world

Explore the dark world of The Blood of Dawnwalker, a vampire RPG set in 14th-century Europe that will be released for PC and consoles in 2026.

Related Articles

Popular Categories