Malaysia seizes AI-chip servers worth $12.11 million

Customs said officers found 30 server units containing AI chips during an inspection on Oct. 15 at Kuala Lumpur International Airport’s free trade zone.[1] The seized shipment was valued at about 49.5 million ringgit, equivalent to $12.11 million, according to customs.[1] The servers were falsely declared as electronic components, customs said.[1] The available information does not specify the number of chips, their models or the precise origin country. Preliminary investigations identified the origin only as an unspecified Asian country.[1]

The servers were due to be re-exported to another country in Asia, according to preliminary investigations.[1] Customs director Aspalila Ag Tuah said that re-export required a trade permit.[1] She also said the shipment had been routed through Malaysia to avoid restrictions when it was exported to its next destination.[1] Malaysia’s Strategic Trade Act 2010 requires approval and a permit for the AI-chip transaction, according to Aspalila.[2] Customs is investigating the case under Section 12 of that act.[2]

Authorities suspect a syndicate has been smuggling high-performance semiconductors through Malaysia’s main airport.[1] A Malaysian firm that facilitated the shipment was called in to assist the investigation.[1] Investigators suspect the shipment was carried out by a network linked to a similar smuggling attempt that customs foiled in June.[1] Customs has linked at least five cases to the syndicate, with chip seizures worth more than 100 million ringgit in total.[1] Aspalila declined to provide further details, citing the ongoing investigation.[1]

Malaysia imposed export controls last year on the movement of advanced AI chips originating in the United States.[1] The United States had pressured Malaysia to curb the flow of those chips into China.[1] Separately, the Malaysian customs director said the seized servers could be used in developing military technology.[2] The seizure followed a series of enforcement operations by airport customs teams during September and October.[2] The evidence does not identify the chips’ country of origin, the shipment’s final destination or whether authorities have made any arrests.[1]