KUALA LUMPUR (April 3): Malaysia’s semiconductor companies are not out of the woods even as the industry is exempted from the latest broad-ranging tariffs imposed by the US.
Semiconductors could still be separately targeted in future trade actions by the US, Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai cautioned. American semiconductor firms operating in Malaysia would not be spared either from potential tariffs, he said.
“Semiconductors are exempt from this round of Trump’s reciprocal tariffs, but there is still a possibility they could be targeted in the next round,” Wong told The Edge.
US President Donald Trump announced in an executive order a 24% tariff on goods imported from Malaysia effective April 9, in a sweeping trade policy hitting all of its trading partners. Semiconductors are among goods exempted from the reciprocal tariff.
Electrical and electronic products account for about 40% of Malaysia’s total export. Malaysia is home to some of the world’s most important semiconductor firms, with the US-based Intel and Germany’s Infineon Technologies hosting massive facilities employing thousands of engineers.
Semiconductors may still be affected indirectly as they are components embedded in products like computers and industrial equipment, which are subject to tariffs, Wong noted.
“If the product is shipped to the US, it will be captured under the equipment tariff,” he said. "So you actually do not escape.”
For now, the industry will "wait and see" given the uncertainty and unpredictability of the Trump administration, Wong added.
The tariffs are not final and Trump has said that the US is open to negotiations on the tariffs. The Ministry of Investment, Trade & Industry has also announced that Malaysia will negotiate with the US on the tariffs.
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