Malaysia has agreed to restrict the sales of Nvidia Corporation’s (NVDA) high end semiconductors after a request was made by the United States.
The US has requested Malaysia not to allow Nvidia chips, especially the ones with AI capabilities, to reach China. This follows increasing fears that such consignments could violate the US export controls on advanced technologies.
Investment, Trade, and Industry Minister Zafrul Abdul Aziz has stated that the United States administration has requested Malaysia to pay attention to the country’s end-users of Nvidia chips.
“They want us to make sure that servers end up in the data centers that they’re supposed to and not suddenly move to another ship.” – Minister Zafrul Abdul Aziz.
He urged the Malaysian government not to allow the high config servers containing Nvidia chips to be channeled elsewhere but to the right data centers. The US has raised concerns regarding the transfer of these chips to China again, as this violates the applicable trade restrictions.
The probe in Singapore adds more spice to the situation. Authorities in Malaysia are investigating different consignments that were tagged Nvidia chips dropping from Singapore to Malaysia. Three people have been named and charged for conspiring to deceive server manufacturers Dell Technologies Inc. and Super Micro Computer Inc. about the final users of the hardware.
Singaporean authorities have alleged that the servers that could contain Nvidia chips that are prohibited from being sold in China may have passed through Malaysia in what would have been an illegitimate manner. Malaysian authorities, however, have claimed that they have not found any sign of fraud in the case of chips manufactured by Nvidia being shipped from Singapore. However, they avowed that they are engaging with US and Singaporean authorities to address any contingencies concerning the shipment of certain technology products.
Growing tensions over semiconductors
The probe into Nvidia’s chip shipments is also an extension of a deep-rooted conflict between the United States and Asia for more innovation in semiconductor technology. The US has been keen on limiting China’s access to high-end silicon, as they believe that this technology may help the Chinese military. As a result, the authorities in the United States put a leash on the exporters of such advanced chips and equipment to make them impose strict regulations.
To curtail the leakage of its export controls, the US has also targeted other areas, including Southeast Asia and the Middle East, as it believes that they acted as middlemen in shipping talent to China. In recent times, the company has faced some criticism, mainly because a high proportion of its revenues originated from Singapore, though the physical shipment of Nvidia products to that country is relatively low.
The US is also examining whether DeepSeek and other Chinese AI start-ups sourced the Nvidia chips through intermediaries in Singapore. US lawmakers have raised alarm over this issue, noting that while Nvidia earns lots of money in Singapore, it is actually not rolling out many shipments to the country. Both Nvidia and Singaporean officials have clarified that the island is a billing hub only, with only a limited number of Nvidia products shipped directly to the area.
While the debate ensues, Nvidia is the center stage in the global computing industry. Recently, Nvidia’s CEO, Jensen Huang, announced that the company is opening a quantum computing lab in Boston.
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