top of page

Chinese Companies Turn to Malaysia for High-End Chip Assembly, Sources Reveal

In a bid to mitigate potential risks arising from expanded sanctions on China's chip industry by the United States, an increasing number of Chinese semiconductor design firms are seeking the services of Malaysian companies for the assembly of high-end chips, according to sources familiar with the matter.

These Chinese companies are specifically approaching Malaysian chip packaging firms for the assembly of graphics processing units (GPUs), as reported by three individuals with knowledge of the discussions.

It is important to note that these requests solely pertain to the assembly process and do not involve the fabrication of chip wafers. Two of the sources also mentioned that certain contracts have already been finalised. Due to the restrictions imposed by the U.S. on the sale of high-end GPUs, which have applications in artificial intelligence advancements, supercomputers and military technology, Chinese semiconductor design firms are facing challenges in securing advanced packaging services domestically.

Analysts have highlighted the struggle faced by smaller Chinese firms in accessing sufficient packaging services. The interest from Chinese companies extends to advanced chip packaging services, which can significantly enhance chip performance and are considered a critical technology in the semiconductor industry.

This involves the construction of chiplets, where chips are tightly packaged to function as a unified and powerful unit. While advanced chip packaging services are not currently subject to U.S. export restrictions, industry insiders express concerns that sophisticated technologies used in this process could potentially become targets for future export curbs to China.

In order to safeguard against potential disruptions in the supply chain and to diversify their options, Chinese semiconductor design firms are turning to Malaysia for chip assembly. This move allows them to tap into the expertise and capabilities of Malaysian chip packaging firms, ensuring the continuity of their operations and reducing their reliance on domestic resources. The identities of the companies involved in these arrangements have not been disclosed due to confidentiality agreements.

  • Chinese semiconductor design firms are seeking Malaysian companies for high-end chip assembly.

  • The focus is on graphics processing units (GPUs) and advanced chip packaging services.

  • This move is driven by concerns over potential U.S. sanctions and the need for reliable packaging services.

Source: SCMP

As technology advances and has a greater impact on our lives than ever before, being informed is the only way to keep up.  Through our product reviews and news articles, we want to be able to aid our readers in doing so. All of our reviews are carefully written, offer unique insights and critiques, and provide trustworthy recommendations. Our news stories are sourced from trustworthy sources, fact-checked by our team, and presented with the help of AI to make them easier to comprehend for our readers. If you notice any errors in our product reviews or news stories, please email us at  Your input will be important in ensuring that our articles are accurate for all of our readers.

bottom of page