Malaysia: New Export Control Directive for Advanced AI Chips

 

On 14 July 2025, Malaysia’s Ministry of Investment, Trade and Industry (MITI) issued Directive No. 1/2025 (“the Directive”), introducing new controls on the export, transshipment, and transit of high-performance AI chips. Issued under Section 12 of the Strategic Trade Act 2010 (STA 2010), the Directive invokes the Act’s “catch-all” control provision, enabling MITI to regulate items not explicitly listed when there is knowledge or reasonable suspicion that they could be used in connection with the proliferation of weapons of mass destruction (WMDs).

This move reflects Malaysia’s commitment to countering the misuse of its territory as a transshipment point to evade U.S. export controls, particularly in relation to sensitive technologies.

Under the Directive, any individual or entity intending to export, transship, or transit specified advanced AI chips must notify MITI at least 30 days in advance if they know or have reasonable grounds to suspect the chips may be used in a restricted activity. “Restricted activity” includes any involvement in the development, production, handling, use, maintenance, storage, or proliferation of WMDs and their delivery systems, or transactions with parties engaged in such activities. Upon receiving a notification, MITI will assess whether to allow the transaction, potentially subjecting it to a permit requirement.

The scope of the Directive is outlined in Annex I, which identifies specific categories of advanced AI chips, such as 3U090, 3A001.u, 4U090, 4A003.u, 5A002.u, 5A004.u, and 5U992.u. These encompass a broad range of high-performance integrated circuits (ICs) — including GPUs, TPUs, neural processors, and AI accelerators — defined by total processing performance (TPP) and performance density thresholds. The listed categories align closely with the expanded advanced computing controls under the U.S. Export Administration Regulations (EAR), particularly category 3U090, which parallels EAR category 3A090.

Exemptions do exist: for example, under category 3U090, IC chips that are not designed or marketed for data center use and have a TPP below 4800 fall outside the scope of control.

Although the accompanying media statement suggested that the Directive targets U.S.-origin AI chips, the Directive itself does not explicitly restrict its application to chips from the U.S. Importantly, under the STA 2010 catch-all mechanism, controls apply regardless of the chip’s origin, provided there is a link to restricted activity. As such, it remains uncertain how strictly MITI will enforce the Directive in cases where U.S.-origin chips are exported for non-WMD-related uses, such as AI development by Chinese tech firms.

Permit applications submitted to MITI must include:

• A re-export license from the originating country, and
• An export control classification from the manufacturer.

This means exporters must comply not only with Malaysia’s domestic laws, but also with foreign export control regimes such as the U.S. EAR, which governs the re-export of controlled AI chips.

Lastly, exporters should also verify whether their AI chips are already listed under the Malaysian Strategic Trade (Strategic Items) List, last updated on 2 June 2025. If so, those chips are considered strategic items and would require a permit from MITI—regardless of whether they fall under Annex I of the Directive.