Malaysian Company Faced with US Sanctions for Dealing With Russia

We often report that Chinese companies are subject to sanctions by the United States for allegedly using technology imported from their country for military purposes. Huawei and DJI are two big companies that have been subject to various obstacles over the past four years. Now according to an Al Jazeera report, a Malaysian company has also been subject to the same restrictions.

Jatronics Sdn Bhd was among 300 companies put on the US sanctions list last month for dealings with Russia. The company, which has been operating since 2003, is said to have sent semiconductor components, wafers and microchips to Russia between April and September 2022 worth $3 million.

These are then used by firms in Russia to produce weapons components. Since the Russia-Ukraine conflict began two years ago, Russia has been subjected to various technological restrictions to cripple the country's economy and weaponry. The components sent to Russia by Jatronics fall into the category of level one which is essential to produce weapons with high precision but which the local company cannot produce itself.

The Ministry of Investment, Trade and Industry (MITI) in a statement issued today said they will investigate the involvement of Jatronics as alleged by the United States authorities.

This incident has an impact on the Malaysian semiconductor industry which now receives various investments from Western and Chinese companies because it is seen as a neutral country. The trade war between China and the United States benefits Malaysia because it has been able to produce chips for over 40 years.

The National Semiconductor Strategy announced by the Prime Minister last week with an investment of $5.3 billion (~RM25 billion) to train 60,000 local semiconductor engineers is one of the government's efforts to seize the opportunities that are now open.

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