THE United States must carefully assess the implications of blanket tariffs on semiconductor imports from Malaysia, as such measures could disrupt critical global supply chains and negatively impact American industries, the US-Asean Business Council has cautioned.
Marc Mealy, executive vice president of the council, said Malaysia plays a pivotal role in the global semiconductor ecosystem, particularly in supplying automotive chips used by American manufacturers.
“There is data that shows a significant number of those chips that end up in the US market have passed through Malaysia,” he told Bernama in an interview.
Malaysia currently accounts for around 15 per cent of semiconductor exports to the US, much of which is consumed by its automotive sector.
“This is a significant number and, therefore, imposing tariffs on semiconductor exports from Malaysia to the US could trigger ripple effects across global supply chains and disrupt manufacturing processes,” Mealy warned.
In 2023, Malaysia exported approximately RM52.11 billion worth of semiconductors and integrated circuits to the US, much of it produced by American giants with a strong presence in Malaysia, including Intel, Broadcom, and Micron.
According to data from the American Enterprise Institute, the US imported an estimated US$40 billion worth of semiconductors in 2024, with Malaysia ranked among the top sources alongside Taiwan, Israel, South Korea, Ireland, Vietnam, Costa Rica, Mexico and China.
While the US administration continues to explore targeted tariffs on specific sectors, Mealy said imposing blanket tariffs on chips from Malaysia would be “highly consequential.”
“Malaysia is a global player in supply chains for chips. If you want to say that when you bring in those chips to the US, you must pay a tax of 100 per cent or 200 per cent to the US government, many importers of those chips would stop buying them,” he said.
“If you stop buying chips, that means certain things like vehicles and electronics do not get manufactured and therefore would not be available in the marketplace.”
Malaysia is also a key global hub for semiconductor testing, assembly and packaging, serving as a transit point for components from Taiwan, Japan and China before reaching global markets.
Given the scale and complexity of these interlinked supply chains, Mealy said Washington must develop a strategic and selective approach if it intends to introduce new tariffs.
“It shows that they recognise Malaysia has a major role to play in that particular industry. You cannot just put 100 per cent tariffs on all chips from Malaysia because you would probably disrupt the marketplace, both here and in America,” he said.
Former US President Donald Trump previously warned of tariffs of up to 300 per cent on imported semiconductors, except for firms already producing in the US or with domestic expansion plans. - September 30, 2025
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