Malaysia’s chip industry falls in crosshairs of US sanctions on Russia

The United States’ efforts to cripple Russia’s war machine in Ukraine have ensnared an unlikely target far from Moscow: Malaysia’s multibillion-dollar semiconductor industry.

Malaysian semiconductor maker Jatronics SDN BHD is among nearly 300 entities that Washington slapped with US sanctions last month over their alleged links to Russia’s military suppliers.

Jatronics, based in Kuala Lumpur, is accused of shipping electronic parts and components to Russia that Moscow needs to sustain the conflict.

Russian customs data shows that one of the Russian companies Jatronics has supplied since Moscow’s full-scale invasion in February 2022 was already sanctioned by Western governments for its alleged ties to Russia’s defence industry.

The latest sanctions, announced on May 1, freeze any US assets held by the targeted entities and bar anyone under US jurisdiction from dealing with them, effectively shutting them out of the US financial system.

US officials have not said that they know for certain that components shipped by Jatronics have actually been used in military equipment.

“Jatronics supplied these components to companies based in Russia that are supplying Russia’s military-industrial complex,” a spokesperson for the US State Department told Al Jazeera.

Some of the materials Jatronics shipped to Russia included Tier 1 items on the US Department of Commerce’s List of Common High-Priority Items, established in the wake of the invasion to stem Russia’s access to technologies needed for the war, the spokesperson said.

The Commerce Department describes Tier 1 items as those “of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems, Russia’s lack of domestic production, and limited global manufacturers.”

Jatronics declined to comment. Russian customs data analysed by the Center for Advanced Defense Studies (C4ADS), a Washington-based think tank, corroborates the US government’s claims.