Malaysian chip firms suspend growth plans over American tariff uncertainties

Leading chip manufacturers in Malaysia have put their investment and expansion plans on hold as they wait for the US to clarify its impending tariffs. Malaysia Semiconductor Industry Association President Wong Siew Hai stated that the chip companies wish the US government would maintain tariff exemptions for semiconductors past the August 1 deadline. He added , “That situation, if it’s clear, then I think investments will continue,” he said. “Everyone is waiting to see how it all plays out.” Malaysia hopes to increase its exports to $282 billion by 2030 On Monday, President Trump warned he could impose a 25% levy on Malaysia, aside from sector-specific levies, starting August 1, unless the two countries agree. Before, the US government had slapped a 24% tariff on the country in April, but later introduced a 90-day pause, which brought down the levies to 10% The US is still Malaysia’s third-largest buyer for chip exports. The Southeast Asia nation is also responsible for packaging nearly 10% of the world’s semiconductors, and around 40% of its exports are electrical and electronic products. In 2024, the country sold over 575.45 billion ringgit-worth of semiconductors, equal to about $135 billion. While the country is doing fairly well, Wong believes companies must ramp up productivity through AI, automation, and robotics to remain “globally competitive.” Last year, Malaysia committed at least 25 billion ringgit, roughly $5.9 billion, to grow its semiconductor industry. The country hopes to raise its exports to 1.2 trillion ringgit, about $282 billion, by 2030, though Wong argued that they’ll need a workforce of at least 300,000 people to achieve the target. The country still faces a shortage of skilled workers and is turning to international recruitment to meet demand. Meanwhile, the country is now home to multiple chip-packaging facilities for Intel Corp., GlobalFoundries Inc., and Infineon Technologies AG. The nation is also encouraging Chinese companies to build data centers as part of its strategy to boost high-quality foreign investment. President Trump warned he may implement a 50% tariff on Brazil’s exports to the US On Wednesday, President Trump announced that he may impose a 50% tariff on Brazil’s exports to the US. He pointed to criminal charges against the former president and his political ally, Jair Bolsonaro—who stands accused of orchestrating a coup—as justification for the tariffs. He described Bolsonaro’s trial as a “witch hunt” and an “international disgrace.” Earlier this week, Trump also sent tariff notices to several countries, including the Philippines, Brunei, Moldova, Algeria, Libya, Iraq, and Sri Lanka. The president still believes that the tariffs will help to rebalance trade deficits. The US also has a trade surplus with Brazil. However, the tariffs it plans to impose on South American countries are considerably higher than those of most other countries, whose levies range between 25% and 40%. Analysts believe tensions are escalating between the US and Brazil, mainly because the South American nation hosted the BRICS summit of emerging economies. So far, Brazilian President Luiz Inácio Lula da Silva has rejected Trump’s call to dismiss charges against Bolsonaro and refuted Trump’s assertion that a 50% tariff is needed to address the trade imbalance between the two nations. He added that Brazil is an independent country and will therefore not yield to any form of tutelage. Moreover, he claimed charges against Bolsonaro fall under the authority of Brazil’s judiciary and therefore cannot be influenced or undermined by external pressure or threats to institutional independence. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot