By Dr Mohd Safar Hasim
In September 2025, the Dutch government took the extraordinary step of seizing control of a semiconductor firm headquartered in the Netherlands but fully owned by a company in China.
The move, executed under the rarely invoked Goods Availability Act, was triggered by concerns that the company in question had transferred sensitive chip production and intellectual property (IP) to China-linked entities without proper oversight.
The Dutch authorities also suspended the firm’s Chinese CEO and installed an independent director with decisive voting power. The message was unmistakable: when strategic technology is at risk, national governments will intervene — even if it means overriding corporate governance.
This is not a historical footnote. It is a live precedent. And for Malaysia, a rising player in the global semiconductor ecosystem, it is a strategic warning.
The developments reveal how quickly a foreign-owned semiconductor firm can become a geopolitical flashpoint. For Malaysia, where several electronics firms operate under foreign ownership or partnership, the Dutch example is a blueprint for what could unfold here — unless legal safeguards and strategic oversight are embedded into our National Semiconductor Strategy.
Malaysia’s Semiconductor Rise: Ownership Is Not Sovereignty
Malaysia’s semiconductor sector is thriving, but structurally exposed. We host over 50 chip-related firms, many of them foreign-owned. We are rich in infrastructure, but poor in control.
The Dutch case shows how quickly foreign ownership can become a liability. The Dutch company’s parent company had already been placed on the U.S. entity list in 2024. By mid-2025, Dutch regulators were investigating internal transfers of IP and production capacity. The September seizure formalised the state’s intervention and affected its share price in the Shanghai stock exchange. China responded by banning exports of that company’s finished products, threatening global supply chains.
The Dutch were accused of “ruthless suppression” while the company in the Netherlands denied the allegations against it, and blaming the unauthorised actions by its suspended CEO. The result: a fractured company, a frozen supply chain, and a cautionary tale for every country hosting foreign-owned fabs.
Malaysia must confront a difficult truth: our semiconductor success is built on foreign investment, but not on strategic autonomy. Our National Semiconductor Strategy (NSS), launched in 2023, is ambitious. It promises RM63 billion in investment, 60,000 trained engineers, and 13 national champions. It positions Malaysia as a global hub for research, development, and commercialisation.
But it lacks the legal and institutional tools to protect strategic assets. There are no foreign ownership thresholds. No national IP repository. No emergency intervention framework. No cross-ministerial review board for foreign acquisitions. No export control contingency planning. In short, we have a growth strategy without a sovereignty strategy.
Mapping Malaysia’s Semiconductor Vulnerabilities
Malaysia’s semiconductor ecosystem is diverse and globally integrated, but it is not immune to the risks exposed by the Dutch case. Several key players operate within our borders, each with distinct ownership structures and strategic implications.
MIMOS, our government-linked R&D institution, plays a vital role in technology development. Yet its commercialisation pipeline and IP retention mechanisms remain relatively underdeveloped. Without a national repository or licensing framework, innovations born in Malaysia risk being patented and monetised abroad.
All in all, Malaysia’s semiconductor landscape is robust in infrastructure but fragile in sovereignty. Without legal safeguards, strategic review mechanisms, and IP retention policies, we risk becoming a high-performing subcontractor in a game where others hold the rules—and the rights.
What Malaysia Must Do—Now
The Dutch acted because they had the legal infrastructure to do so. Malaysia does not. We need a Semiconductor Sovereignty Act — one that empowers the government to intervene in chip firms during national emergencies.
We need a national IP repository to ensure that Malaysian-designed chips are registered, licensed, and retained locally.
We need a strategic M&A review board to evaluate foreign acquisitions through a national security lens.
And we need to lead ASEAN in defining shared principles on IP protection, asset governance, and dispute resolution.
Some may argue that such measures could deter foreign investment. But sovereignty is not anti-investment — it is pro-resilience. Malaysia can remain open to global partnerships while safeguarding its strategic interests. Transparency, legal clarity, and institutional readiness are not barriers—they are stabilisers.
The Dutch case also reveals the importance of scenario mapping. What happens if a Malaysian fab is caught in a U.S.–China tech standoff? What if export controls freeze our supply chains? What if a foreign board suspends local operations? These are not hypothetical questions. They are plausible scenarios. And we must be ready.
Malaysia should simulate geopolitical disruption scenarios, develop fallback production options, and build strategic stockpiles of critical components.
We should monitor dual-use technologies and establish protocols for rapid legal intervention. We should also educate our engineers, policymakers, and investors on the strategic dimensions of semiconductor governance.
Finally, Malaysia must lead regionally. ASEAN has no unified framework for semiconductor sovereignty. Malaysia can propose a charter on IP protection, strategic asset governance, and cross-border dispute resolution. We can host a regional summit, convene legal experts, and build a shared vocabulary for resilience. This is not just about chips—it’s about leadership.
Malaysia’s semiconductor future depends not just on investment and talent—but on foresight, resilience, and control. The Dutch seizure is not an anomaly. It is a precedent. We must act before we become the next case study.
The views expressed here are entirely those of Dr Mohd Safar Hasim, a Council Member of the Malaysian Press Institute (MPI)
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