KUALA LUMPUR (Aug 7): The Federation of Malaysian Manufacturing (FMM) has called for urgent clarification and stronger policy support from the government after the US proposed to impose a 100% tariff on imported semiconductor chips.
The proposed tariff, which would exempt companies manufacturing or planning to manufacture in the US, has raised concern among US-based semiconductor firms operating in Malaysia, many of which rely on the country as a key hub, said the FMM in a statement on Thursday.
“This proposed policy shift has raised immediate concerns among manufacturers, many of whom are seeking urgent clarification on whether their Malaysia-based operations will now fall within the scope of the new measure,” FMM president Tan Sri Soh Thian Lai said in the statement.
Semiconductors had previously been excluded from US reciprocal tariffs, but on Wednesday, US President Donald Trump announced that he would impose a tariff of about 100% on all chips and semiconductors coming into the US, while exempting only companies that manufacture or are planning to manufacture within the US.
While the Ministry of Investment, Trade and Industry (Miti) has offered early assurances that exemptions may apply to some US firms in Malaysia, Soh stressed the need for official confirmation to avoid undermining long-standing investments.
“Clear and timely guidance is critical to maintaining investor confidence and avoiding disruption to supply chains that are deeply integrated with the US and global markets,” he said.
The FMM said it is engaging with US counterparts to help Malaysian manufacturers access new markets, form partnerships and improve supply chain integration, but noted that the expansion process is capital-intensive.
Therefore, the federation urged the government to strengthen both domestic and outward investment policies, especially within the framework of the ongoing National Semiconductor Strategy (NSS).
“The NSS, which is currently being implemented, must be driven forward with greater urgency and focus,” said the FMM, highlighting the need for investment in integrated circuit design, advanced packaging, wafer fabrication, research and development, and talent development.
The FMM also called for targeted support measures, including regulatory facilitation, specialised advisory services, bilateral engagement to ease market entry barriers, and access to financing.
Earlier on Thursday, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz told Parliament that Malaysia has asked the US for details on its plan to impose a 100% tariff on imported semiconductor chips.