Malaysia’s Ministry of Investment, Trade and Industry (Miti) is reviewing existing laws to prevent the country from being used as a transit point for the re-export of restricted graphics processing unit (GPU) chips, local media NST online reported on Thursday.

Minister Johari Abdul Ghani said Malaysia currently lacked specific legislation to prohibit the movement of such shipments, but the government wanted to ensure imported GPUs were used for their declared purposes domestically, he was quoted as saying.

He said the review followed US export restrictions, which require greater scrutiny over the movement and intended use of advanced semiconductor chips.

“We don’t have a specific law to stop any chip movement. But this is the thing that I want to make sure of, because last time, there was no restriction.

“But now when the US imposes a restriction, as a country, we want to make sure that whatever chip arrives here is meant for our own use, for our own data center,” he told reporters at an event in Kuala Lumpur.

The government was concerned about companies importing GPUs into Malaysia under the pretext of using them in local data centers, only to re-export the chips without actually deploying them, Johari said.

“When the GPU arrives here, then they re-export. So that part now, the US deems it illegal to get that chip. So as a country, we want to make sure that such activity cannot take place in our country,” he was quoted as saying.

He said the government was examining whether existing laws could be applied to take action against parties involved in such transactions. The government was reassessing GPU chip movements following US export restrictions, according to him.

Johari’s remarks came amid media reports of an alleged affair involving NVIDIA CEO Jensen Huang and a woman accused of helping entities circumvent US export restrictions on high-performance chips to China.

Huang reportedly acknowledged the affair, prompting the US chipmaker to launch an internal investigation. The reports have renewed scrutiny of whether Malaysia is being used as a transit point to circumvent Washington’s restrictions on the export of advanced AI chips to China.

Malaysia introduced export controls last year on the movement of US-origin high-performance AI chips, following pressure from Washington to curb the flow of such chips to China, according to earlier reports.

Featured photo credits: MITI

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