Cover Story: Chinese Chipmakers Look to Malaysia to Sidestep U.S. Tariffs

Penang is popular choice among China’s chip companies seeking expansion abroad

As global supply chains are braced for disruption following Donald Trump’s re-election, China’s chipmakers are speeding up efforts to expand production abroad to avoid potential trade barriers.

And Malaysia, with its strategic location and robust infrastructure, is becoming a popular destination.

The northwestern state of Penang has earned itself the nickname “Silicon Valley of the East” and now houses the highest concentration of integrated circuit design and R&D companies in Malaysia.

The island’s semiconductor assembly and testing industry dates back to the 1970s, when Bayan Lepas was established as Malaysia’s first free trade zone to attract foreign investment.

Bayan Lepas is now home to an array of leading chipmakers from the United States, China, Japan and Europe, alongside a growing number of local startups.

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