US Trade Curbs Hit Malaysia’s Solar, Semiconductor Push

What Did the US Just Announce on Polysilicon?

US President Donald Trump announced measures covering polysilicon and its derivatives — ingots, wafers, solar cells and modules. They combine a 15 per cent tariff with minimum import prices, effective Dec 4.

The policy aims to strengthen US domestic manufacturing and cut reliance on China across solar, semiconductor, AI and energy-security supply chains.

How Big Is the Gap Between US and Global Polysilicon Prices?

According to Bernreuter Research, the proposed US minimum import price for polysilicon is US$21 per kg, against a global spot price of around US$4.78 per kg.

That is more than four times the market rate, a gap large enough to reshape sourcing decisions for any company selling into the US.

The measures also respond to China’s dominance of the supply chain: the International Energy Agency (IEA) puts China’s share of global polysilicon capacity above 80 per cent, and its share of upstream solar components near 90 per cent.

Is Malaysia’s Solar Industry Just an Export Manufacturing Base?

Data from the Malaysian Investment Development Authority (MIDA) counts about 250 companies in Malaysia’s solar ecosystem, spanning upstream polysilicon, wafer, cell and module production and downstream inverters, balance-of-system components and system integration.

The Malaysia Photovoltaic and Sustainable Energy Industry Association (MPSEA) cautioned this figure is not 250 manufacturers. It includes a small number of large multinational manufacturers alongside local developers, EPCC contractors, consultants, distributors, installers, system integrators and O&M providers.

Two Complementary Industries

MPSEA describes an export-oriented manufacturing base dominated by multinationals, and a separate domestic deployment and services ecosystem driven by Large Scale Solar (LSS), rooftop solar, the Corporate Renewable Energy Supply Scheme (CRESS) and energy storage.

MPSEA said future growth will depend on domestic and regional deployment, higher local participation, and moving beyond basic assembly into higher-value activities.

Why Does Malaysia Face a Tariff Disadvantage on Solar Exports?

Malaysia hosts solar-grade polysilicon production in Samalaju, Sarawak, plus integrated ingot, wafer, cell and module manufacturing in Kuching and other industrial locations.

MPSEA said Malaysia is not currently listed among countries receiving differentiated tariff treatment, so exports of covered solar products to the US may face both the minimum import price and the additional tariff.

Even manufacturers using non-Chinese polysilicon may not automatically be exempt, making origin verification and supply-chain documentation increasingly important.

MPSEA said Sarawak’s hydropower resources could support lower-carbon production, but this advantage is only meaningful if products can demonstrate transparent origin and compliance throughout the supply chain.

The association said the government should engage US authorities to seek recognition of Malaysia as a reliable, transparent and lower-carbon supply-chain partner.

Could Displaced Supply Create New Risks Elsewhere?

MPSEA noted that solar supply displaced from the US market may be redirected to Asia and other regions, increasing competition and adding downward pressure on global prices.

It said Malaysia must diversify its export markets while strengthening domestic demand and moving towards higher-value, traceable and technologically advanced solar products.

Will Solar Demand in Malaysia Still Grow Despite the US Curbs?

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there could be a knee-jerk reaction as US businesses adjust to higher import costs, but expanding US domestic production will take time and capital expenditure.

He pointed to data centre electricity demand in Malaysia, where load utilisation rose to 1,054 megawatts (MW) in Q1 2026 from 190MW in Q2 2024 — a 5.5-fold increase — underpinning demand for a diversified energy mix including solar.

He does not expect the US measures to have a major impact on Malaysia’s broader solar industry. “The impact is there, but I don’t think it will crash the market,” he said.

Could Semiconductors Be the Beneficiary of These Curbs?

Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said Malaysia is well positioned to capture a larger share of the global semiconductor supply chain as it shifts away from China.

• US tariffs of 15 per cent plus minimum import prices on polysilicon and solar products take effect Dec 4.
• The US price floor of US$21/kg is more than four times the global spot price of US$4.78/kg (Bernreuter Research).
• Malaysia is not on the list for differentiated tariff treatment, so its solar exports to the US may face both the tariff and the price floor.
• Malaysia’s data centre electricity load rose from 190MW (Q2 2024) to 1,054MW (Q1 2026), supporting domestic solar demand.
• MSIA sees the shift away from China-centric supply chains as a potential opportunity for Malaysia’s semiconductor sector.

Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.

Want to invest in Bursa Malaysia or US markets? Contact Dexter Chia, an AI Driven Remisier who has 2,200+ clients at Malacca Securities Sdn Bhd (M+ Global). M+ Global Invitation Code: UBZQ | WhatsApp: +60169059789 | Why Choose Dexter?