Chinese Semiconductor Firms Turn to Malaysia for GPU Assembly Amid U.S. Sanctions

The move, which doesn't violate U.S. restrictions, is a precaution against potential expansion of sanctions on China's chip industry.

Chinese semiconductor design companies are partnering with Malaysian firms to assemble high-end chips, mainly graphics processing units (GPUs), as a precaution against the potential expansion of U.S. sanctions on China's chip industry.
The assembly process, which doesn't violate U.S. restrictions, is distinct from the fabrication of chip wafers.
Malaysia, a significant player in the semiconductor supply chain, is emerging as a preferred destination for Chinese firms seeking assembly services outside China.
Chinese firms are also exploring chip assembly in countries outside China, like Singapore, Vietnam, and India, to mitigate geopolitical risks between the U.S. and China and to ease access to non-Chinese markets.
In November, Nvidia lost to Huawei Technologies Co for a sizeable artificial intelligence chip order from Chinese tech giant Baidu Inc, reportedly due to the U.S. embargo on AI technology chips for China.