Report: Malaysia risks sanctions following envoy’s remarks over semiconductor exports with Russia

·3-min read
Malaysia plays a small but crucial role in the global semiconductor industry as one of the main sites for assembly — testing and packaging for the likes of Toyota, Ford, General Motors and Skoda Auto. ― Picture by Yusof Mat Isa
Malaysia plays a small but crucial role in the global semiconductor industry as one of the main sites for assembly — testing and packaging for the likes of Toyota, Ford, General Motors and Skoda Auto. ― Picture by Yusof Mat Isa

KUALA LUMPUR, April 29 — Malaysia could fall foul of Western-backed sanctions on Russia after a Malaysian envoy to Moscow expressed appreciation in Russia for its interest in its semiconductor industry.

According to South China Morning Post, Malaysian envoy Bala Chandran Tharman had raised eyebrows among foreign policy observers for his comments and exuberance that Malaysia would consider “any request” from Moscow for the sale of semiconductors.

It quoted international relations expert Hoo Chiew Ping as saying that while Malaysia is indeed a major fabricator of electronics and semiconductors, it might not necessarily own the intellectual property for the parts, which could belong to US and Japanese companies who are major investors in the Malaysian market.

“Malaysia can be blacklisted for breaching the sanctions and IP rights. This will have dire consequences for its semiconductor manufacturing and export economy,” said Hoo.

Tunku Mohar Tunku Mokhtar, a Malaysian political expert, also said the move would be putting Malaysia at risk when other countries were banning trade with Russia for their attack on Ukraine.

Mokhtar believed that the ambassador was just being diplomatic in his response, “but in doing so, it also shows opportunistic gestures since Taiwan has banned the export of such products to Russia”.

Malaysia plays a small but crucial role in the global semiconductor industry as one of the main sites for assembly — testing and packaging for the likes of Toyota, Ford, General Motors and Skoda Auto.

It is considered one of the world’s largest semiconductor exporters with an annual volume of US$8.7 billion (RM37.9 billion) in sales.

Chandran had reportedly said in an interview published on April 23 that because Malaysia’s industries were “market oriented”, he was “quite sure that any request from the Russian side regarding the supply of such products will be considered”.

US commerce secretary Gina Raimondo had reportedly said that countries that tried to circumvent its sanctions and export controls would be cut off from US equipment and software they need to make their products.

Geostrategic expert Azmi Hassan said that although Chandran was doing his job being diplomatic to the Kremlin, it was not the right time to be conducting new business with Russia.

“With the war in Ukraine dominating the news, the diplomat should be more careful with what he says as it ‘would not look good for Malaysia’,” he said.

“As Malaysia is trying to implement our foreign policy framework for post-pandemic recovery, we need to look after our reputation as a destination for foreign investment by threading these issues carefully.”

Malaysia is part of an alternative global technological supply chain in Washington’s point of view — part of its effort to strategically compete with Beijing in the US-China trade war that started under former US President Donald Trump.

But any past goodwill from Washington could be undone by Chandran’s interview, which was shared by Russian state-owned news media as well as the Russian embassy in Kuala Lumpur, and reflects Moscow’s intensified public relations, according to a report on pro-Russian sentiments by ISEAS-Yusof Ishak Institute.

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