Malaysian customs seized 30 servers containing advanced AI chips worth RM49.5 million, about $12.1 million, at Kuala Lumpur International Airport, officials said on October 28. A customs enforcement team found the servers on October 15 during an inspection of a warehouse in the airport's free trade zone, where they were being moved through Malaysia without the authorisation the country requires for high-performance AI chips.
KLIA customs director Aspalila Ag Tuah said the servers arrived from an unnamed Asian country under a single air waybill that listed them as electronic components. Initial investigations found they were to be re-exported to another country in Asia.
“The servers were declared as 'electronic components' to avoid detection by the authorities”— Aspalila Ag Tuah, KLIA customs director
The case is the fifth this year that customs has linked to the same suspected syndicate, and the five seizures together are worth more than RM100 million, or more than $24 million. Aspalila said the syndicate used Malaysia as a transit point to get around export restrictions. In June, customs seized 72 AI servers worth about $13 million at the same airport.
Key facts
- 01Malaysian customs seized 30 AI chip servers worth RM49.5 million ($12.1 million) at KLIA on October 15.
- 02The servers were declared as electronic components and were to be re-exported to another Asian country.
- 03It is the fifth 2026 case tied to one suspected syndicate, with seizures totaling more than RM100 million.
- 04Strategic Trade Act 2010 violations carry fines up to RM20 million for companies and 10 years' jail for individuals.
- 05No arrests have been made, and the chips' brand, origin and destination have not been disclosed.
No arrests have been made. The companies that handled the shipment have been called in to assist the investigation, and officials declined to name the chips' brand, where they were made or where they were headed, citing the ongoing probe.
The case is being investigated under Section 12 of Malaysia's Strategic Trade Act 2010. Companies found guilty face fines of up to RM20 million, while individuals convicted of a wilful offence face fines of up to RM10 million, up to 10 years in prison, or both.
Malaysia's Investment, Trade and Industry Ministry classifies the chips as dual-use items regulated under that act. Under the ministry's Directive No. 1/2025, companies need a permit to move certain advanced chips through Malaysia and must apply 30 days before the chips enter the country. Customs officials said the chips could potentially be used in developing military technology.
“can be used in the development of weapons of mass destruction”— Masyita Ismail, Official, Malaysia's Investment, Trade and Industry Ministry
Malaysia tightened export and transshipment controls on U.S. chips last year. It has also opened other probes, including one into how servers with U.S.-made Nvidia chips bound for Singapore ended up in Malaysia; authorities said at the time they found no evidence of illicit trade in advanced semiconductors.
The seizure comes as the United States tightens checks on how advanced chips reach China through third countries, including Malaysia and Thailand. Nvidia has also cut its list of approved buyers in Asia as part of the wider crackdown.
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