Semiconductor Tariff Shock!

Local semiconductor companies in the tech supply chain will need to brace for impact since the United States has now voiced its intention to reshore this type of manufacturing back to the US with plans to impose a 100% tariffs on semiconductors. 

While Malaysia’s semiconductor exports to the United States remain exempt from retaliatory tariffs for now, the industry will be severely impacted if tariffs are eventually imposed on this sector.

 

Source: https://semiwiki.com

 

Based on 2024 data, Malaysia’s exports of electrical and electronics (E&E) goods to the United States reached RM119.86bil. Semiconductor exports alone were valued at some RM60.6bil. This industry involves more than 72,000 skilled workers and is supported by over 7,200 local suppliers, comprising mainly small and medium enterprises.

 

Meanwhile, analysts are split on the effect the latest levies will have on the domestic semiconductor industry, noting that Malaysia is not a big-scale manufacturer per se, but is more active in the assembly, testing and packaging end of the production chain.

 

The protectionist stance could accelerate the shift of manufacturing footprints into the United States, particularly among firms seeking to mitigate tariff risks. It sounds inevitable, but to build new plants in the US and find the workers is going to be tough. The cost and time involved in getting this idea going may deter many. And the way forward for us is to diversity and move-up the value chain and leave the US in its primitive state, like Trump himself!

 

Reference:

Semiconductor tariff shock, Daniel Khoo and Keith Hiew, The Star, 8 Aug 2025