KUALA LUMPUR (Jan 9): Malaysia's neutral stance in the US-China tech cold war faces growing challenges moving forward, according to Professor Dr Chris Miller.

As the author of Chip War: The Fight for the World’s Most Critical Technology, Miller noted that Malaysia has benefited from trade diversion due to its neutrality, but sustaining this position will become more difficult.

“The geopolitical landscape brings both opportunities and risks, but [maintaining] neutrality is challenging in the semiconductor industry, which is a strategic industry,” he said in a dialogue session at Forum Ekonomi Malaysia (FEM2025), where Maybank is the principal partner, here on Thursday.

According to Miller, who is a professor of international history at The Fletcher School, Tufts University in the US, the investment boom in the Malaysian semiconductor space over the last couple of years was partly driven by the country’s neutral stance.

“The opportunities for Malaysia are certainly clear. Being seen as a neutral ground, Malaysia could attract investments from different countries around the world.

"But the challenge is that both China and the US have increasingly adopted trade measures that are more intrusive in the semiconductor supply chain,” he said.

For instance, the US is regulating how American chip-making tools can be used, even if they are being installed in Taiwan. Meanwhile, China is also increasingly regulating the exports of critical minerals.

“So, if a country is importing these minerals from China, the country is not even allowed to export them to certain countries, say, the US,” said Miller.

He further said that this trend of the two superpowers increasingly involving politics in the global supply chain, even if it involves another country, has a long way to run.

“It means that neutrality is going to be difficult to maintain, because multiple countries will be trying to influence the shape of the supply chain, and use the fact that their companies, technology and materials are present to assert different forms of political leverage,” Miller added.

Having said that, it does not mean that maintaining neutrality is impossible for Malaysia, although it is going to be difficult, he said.

“There are real challenges to think through, in terms of what maintaining neutrality means, and what are the choices that one will have to make when China and the US have different views,” said Miller.