Taiwan's AI chip exports to Malaysia have quadrupled, raising suspicions of diversion to China

The US government is tightening restrictions on semiconductor exports to China, but in line with this increasing pressure, Taiwan's semiconductor exports to Malaysia are increasing, which could mean Malaysia is becoming a smuggling hub, according to IT news site Tom's Hardware.

Massive 366% chip shipment surge to Malaysia amid increased Nvidia AI GPU smuggling curbs, ahead of looming sectoral tariffs | Tom's Hardware

According to Taiwan's Bureau of International Trade, exports of computer system products to Malaysia in March 2025 totaled $1,873.89 million (approximately 266 billion yen), up 366% from the same month of the previous year, from $419.2 million (approximately 57 billion yen) in March 2024, and an increase of more than 55,000% from $3.4 million (approximately 484 million yen) in March 2023, a remarkable increase.

The US government has announced the ' AI Proliferation Rules ' in January 2025, and with the implementation on May 15th fast approaching, it is not unnatural that the import amount of AI hardware would surge due to last-minute demand, Tom's Hardware said. In fact, just after the US government restricted the sale of high-performance CPUs and GPUs to China in December 2023, the number of computer systems heading from Taiwan to Malaysia also increased sharply.

However, Malaysian companies are accelerating their purchases of not only AI servers but also parts from Taiwan, which may include AI accelerators such as NVIDIA's 'H100', which has been accused of being smuggled to China.

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In March 2025, a suspect was arrested in Singapore for attempting to smuggle NVIDIA chips into China, and Tom's Hardware pointed out that 'the surge in semiconductor shipments from Taiwan to Malaysia raises the question of whether Malaysia is trying to enter the cloud AI data center market or whether it is a transit point for further smuggling of regulated parts to China.'

There is a caveat to this assumption: Taiwanese authorities tally up export items based on the Harmonized System of Trade ( HS) code , but the public data does not break them down, so the 'computer systems' exported to Malaysia could include everything from cheap laptops to expensive AI servers.

'While the HS code cannot distinguish between AI servers and cheap laptops, it is clear that Taiwan's exports of computer systems to Malaysia began to accelerate shortly after the United States restricted exports of advanced AI GPUs to China. The US government has also recently asked the Malaysian government to step up its scrutiny of high-tech products exported from the country to China, suggesting that there is suspicion that NVIDIA's high-end GPUs are flowing to China,' Tom's Hardware said.