Malaysia's Semiconductor Exports to the US Remain Exempt From Tariffs, Says Johari

Malaysia's semiconductor exports to the United States continue to be exempt from US tariffs, according to Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani. Speaking on 13 October 2026, he said Washington had given no indication that it would impose tariffs on semiconductors from Malaysia, as reported by Malay Mail and Bernama.

Why this matters

Semiconductors and electrical and electronic (E&E) products are Malaysia's most important exports. The United States is a major destination. Any tariff on these goods could hurt manufacturers, their suppliers and the many workers employed in the sector.

Reports noted that a broader US measure imposes a tariff on many Malaysian goods, but semiconductor articles are among the exempt categories. Keeping chips exempt protects one of the country's biggest export engines.

Strong demand from the US

The timing of the reassurance is significant. Malaysia's exports surged 54.5% in September 2026, led by E&E products. The Star reported that exports to the US rose 89.9% to a record RM38.03 billion that month, boosted by E&E shipments. We covered the full trade data in our September exports report.

Much of this demand is linked to the global build-out of AI and data centre infrastructure, which requires large volumes of chips and electronic components.

Key takeaway: chip exports to the US are a major pillar of Malaysia's trade growth, so the tariff exemption gives exporters important stability for now.

Remaining uncertainties

While the exemption remains in place, trade policies can change. Malaysian officials and industry groups continue to monitor developments in Washington. Exporters also face other risks, such as shifting supply chain strategies by multinational companies, competition from other countries and global demand cycles in the chip industry.

The Investment, Trade and Industry Ministry has said it will continue to strengthen market diversification and help exporters adapt to changing global conditions.

Diversifying markets

Even with the exemption, Malaysia continues to look beyond any single market. In September, exports to Asean rose 46.2% and exports to China rose 22.1%, according to The Star's report on the trade data. Building strong trade links in several regions helps reduce the risk that a policy change in one country could disrupt the whole sector. For exporters, diversification also means learning new market requirements, certifications and customer expectations, which takes time and investment but builds resilience.

What it means for Malaysians

For workers and businesses, the exemption has practical implications:

1. Job stability: factories in Penang, Kedah, Selangor, Johor and elsewhere depend on export orders, so continued access to the US market supports employment.
2. Supplier SMEs: companies supplying parts, packaging, logistics and services to chip makers benefit from steady export demand.
3. Investment confidence: foreign investors weigh trade risks when choosing where to build plants. Stability supports new investment.
4. Economic growth: strong E&E exports contributed to Malaysia's 5.3% GDP growth in the third quarter.

For anyone working in or around the E&E sector, staying informed about trade developments is useful, since policy changes can quickly affect orders and hiring.

What to watch

Watch for any changes in US trade policy towards semiconductors, as well as updates from Malaysian officials on ongoing discussions. Monthly trade data will also show whether exports to the US remain strong in the final quarter of 2026.