THE United States' proposed restrictions on artificial intelligence (AI) chip shipments to Malaysia and Thailand are expected to have only a limited impact on Malaysia’s electronic manufacturing services (EMS) sector, according to Maybank Investment Bank (IB) Bhd.
International media reported last week that Washington may impose new rules to prevent AI chips from being routed to China through Southeast Asian intermediaries.
However, Maybank IB said Malaysia’s EMS sector has minimal direct exposure to AI-related products and is thus unlikely to be significantly affected.
“While there may be near-term delays or rerouting of AI-related orders, exemptions for US and allied-origin customers could soften the blow,” it noted in a report released today.
“We maintain our positive view on EMS, preferring names with diversified product portfolios and lower regulatory exposure,” the investment bank added.
MIDF Amanah Investment Bank Bhd, in a separate note, said the development may cause short-term uncertainty among investors but does not alter its positive outlook for the sector.
“It is also plausible that hyperscale operators and major cloud providers may accelerate building their data centres and rush orders for high-end AI chips now, before Trump’s refashioned AI diffusion rule is officially announced and before the grace period ends,” it said.
Former US President Donald Trump rescinded the Biden administration’s framework for controlling AI chip exports in May 2025. A new version of the policy has yet to be finalised.
“Those with AI ambitions will want to ensure that their racks are locked and loaded with the most advanced chips before the licensing regime begins,” MIDF added.
It also highlighted recent remarks from a Malaysian contractor suggesting an uptick in project award timelines, with clients potentially increasing capacity allocations to Malaysia in anticipation of expanded US tariffs. - July 7, 2025
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