Chinese companies turn to Malaysia for chip assembly amid US sanctions

Chinese semiconductor companies are reportedly turning to Malaysia for their high-end chip (GPU) assembly. A major reason behind this move is to lessen the impact of U.S. restrictions on China’s chip industry and expand the chipset reach outside the native region.

Malaysia is a well-known semiconductor supply chain hub. It accounts for 13% of the global market for chipset packaging assembly and testing. The Chinese companies are now looking to enter Malaysia to boost the chip assembly and get beneficial outcomes amid US sanctions.

According to the details, China is seeking help from Malaysian chip packaging firms to manufacture specified GPUs. Eventually, Chinese companies only demanded Malaysia participate in the chip assembly instead of the chip wafers production.

Due to U.S. restrictions, small-scale semiconductor industries in China are concerned with securing sufficient advanced packaging services. But advanced chip assembling in Malaysian firms can boost chip performance and reduce critical situations.

Notably, China is also seeing Malaysia as a favorable step due to its strong relations, effective costs, skilled labor force, and advanced technology. The global provider of semiconductor assembly in Malaysia – Unisem group also shared their words on this matter:

“Due to trade sanctions and supply chain issues, many Chinese chip design houses have come to Malaysia to establish additional sources of supply outside of China to support their business in and out of China.”

Some of the projects in this segment have already received approval. It’s unclear which companies are seeking help from Malaysia. However, Huawei might take a chance in this matter to empower its semiconductor growth and extend the business both inside and outside of China.

(Source)