Malaysian customs said Wednesday (Oct. 28) it had seized 30 servers containing advanced AI chips worth about 49.5 million ringgit ($12.1 million) at the Kuala Lumpur International Airport (KLIA) free trade zone on Oct. 15, according to Reuters, The Star and Malay Mail, which carried a Bernama report. KLIA Customs director Aspalila Ag Tuah announced the seizure at a press conference. The AP reported that officials believe a syndicate is using Malaysia as a transit hub to re-export the chips to another Asian country.
Aspalila said the servers were brought into the free trade zone from an Asian country under a single air waybill that declared them as generic electronic components, The Star reported. Reuters quoted her as saying the servers were falsely declared as electronic components and shipped through Malaysia so that no restrictions would apply on export to the next destination. She said they were headed to another Asian country, and Reuters reported she said that re-export required a trade permit. Bernama described the attempt as one to transit the servers without the required authorisation. The New Straits Times reported she said investigators suspected the servers were subject to controls under the Strategic Trade Act, and that the servers were valued at 45 million ringgit, with estimated taxes of 4.5 million ringgit bringing the total to 49.5 million.
Aspalila said it was the fifth case this year believed to involve the same syndicate, with total seizures above 100 million ringgit, according to The Star and Reuters. Reuters reported she said the shipment was suspected to have been carried out by a network responsible for a similar attempt customs foiled in June, and she declined to give further details citing the ongoing probe. A Malaysian firm that facilitated the shipment was called in to assist, Reuters reported, and Malay Mail said no arrests had been made.
Officials did not name the chip maker or the countries involved. Masyita Ismail of the Investment, Trade and Industry Ministry’s Strategic Trade Secretariat said brands, countries of origin and destinations could not be disclosed because investigations were continuing, Malay Mail reported. Aspalila said the chips could potentially be used in weapons development, The Star reported.
Masyita said the chips are classified as dual-use items subject to strict controls, and the cases are being investigated under Section 12 of the Strategic Trade Act 2010, Bernama reported. The act provides for a fine of up to 10 million ringgit, up to 10 years in prison or both for an individual convicted of a wilful offense, and a fine of up to 20 million ringgit for a corporation. Reuters reported that Malaysia imposed export controls last year on advanced AI chips of U.S. origin, following pressure from the United States to stem their flow into China.
Malaysia is also a data-center site, including for a Firmus capacity deal with OpenAI, and the Financial Times reported a Tencent chip lease across Southeast Asia.
Sources
- Reuters via CNA: AI chips worth US$12.1 million seized at Malaysia airport, customs authority says (October 28, 2026)
- The Star (Farik Zolkepli): RM49.5mil in AI chips intercepted (October 29, 2026)
- Malay Mail / Bernama: KLIA Customs seizes RM49.5m in AI chips with potential military uses, fifth case in RM100m syndicate probe (October 28, 2026)
- AP: Malaysia seizes servers with advanced AI chips suspected of violating export controls (October 28, 2026)
- New Straits Times (Austin Camoens): Customs foils bid to transit RM49.5mil AI chips through Malaysia (October 28, 2026)