Investing.com-- Malaysia is set to tighten regulations on semiconductor shipments as the U.S. pressures the country to monitor high-end NVIDIA (NASDAQ: NVDA ) chips over concerns they are being illegally rerouted to China, the Financial Times reported on Sunday.
Malaysian Trade Minister Zafrul Aziz told the FT that Washington is demanding strict tracking of Nvidia chips entering Malaysia to ensure they are not diverted to unauthorized destinations, particularly Chinese buyers seeking to circumvent U.S. export controls.
The government has formed a task force to tighten oversight, particularly in the fast-growing data center sector, which heavily relies on Nvidia’s advanced processors, the FT report stated.
The crackdown follows a $390 million fraud case in Singapore involving the suspected sale of Nvidia chips to China via Malaysia, according to the report.
The U.S. has imposed strict export controls on AI chips, fearing they could aid Chinese military advancements.
Malaysia, which has attracted over $25 billion in data center investments from Nvidia, Microsoft Corporation (NASDAQ: MSFT ), and ByteDance, now faces increasing scrutiny over its role in the global semiconductor supply chain, the report added.