Malaysia's hopes of becoming a global data center hub will be affected by President Joe Biden's latest directive that will limit access to chips with US technology. According to a Bloomberg report, the directive to be issued today places countries in the world into three main categories.
The first category receives full access to chips for data centers, consisting of US allies such as Australia, Japan, Taiwan and the European Union. Malaysia is placed in the second category, with the maximum amount of data center power being limited. Apart from Malaysia, other Middle Eastern and Southeast Asian countries also face the same fate.
The last category is countries categorized as enemies of the US such as China, Russia, Myanmar and Iran. Countries in this category are barred from importing data center chips.
Countries in the second category will be granted unrestricted access if they agree to security and human rights requirements set by the US. The US will grant Verified End User (VEU) status to countries that comply with these requirements.
Malaysia and Middle Eastern countries were placed in the second category because the US suspected that these countries were being used by third-category countries to circumvent previously imposed technological barriers. In 2011, a Malaysian company was placed on the US Entity List for selling semiconductors to Russia for military purposes.