In response to rising U.S.-China tensions, Malaysia has seen a surge in foreign direct investment, mostly from multinational IT and semiconductor businesses. Meanwhile, China has diversified its chip manufacturers from different countries, with firms like Brite Semiconductor reportedly buying American software and receiving financial assistance from the U.S. without violating export curbs.
Key takeaways:
- Chinese semiconductor design companies are reportedly turning to Malaysia for the assembly of their high-end chips, known as graphics processing units (GPUs), to limit financial risks amidst US' export restrictions.
- Malaysia is seen favorably by Chinese chip design companies due to its favorable relations with China, low cost, skilled labor force, and advanced machinery. The country is a major semiconductor supply chain hub and has seen a surge in business and queries from Chinese customers.
- Despite US export curbs, Brite Semiconductor, a top Chinese chip designer, is reportedly buying American software and has financial assistance from the United States. It continues to have access to critical U.S. technology from two software companies located in California, Synopsys and Cadence Design.
- Malaysia has seen unprecedented amounts of foreign direct investment, mostly attributable to multinational IT and semiconductor businesses. As the sixth-largest source of semiconductor exports, Malaysia accounts for 13% of the worldwide market for packaging, assembly, and testing services.