Malaysian data centre market shaken by S'pore's chip smuggling probe

Malaysia's burgeoning data centre industry has quickly felt the fallout of Singapore's probe into Nvidia chips that were allegedly sent to third countries by fraudulently marking Malaysia as their final destination.

- Shannon Teoh

KUALA LUMPUR -

Singapore Home Affairs and Law Minister K. Shanmugam revealed on March 3 that the police were investigating whether servers from US firms Dell and Supermicro containing the prized chips used in artificial intelligence (AI) applications ended up in unknown final destinations after being first shipped to Singapore-based companies, and then exported to Malaysia.

In a 15-minute period after the news broke on the afternoon of March 3, Malaysian hardware manufacturer NationGate's share price fell by the maximum daily limit of 30 per cent, shedding RM1.3 billion (S$391 million) in market capital.

The company, which manufactures servers on behalf of the likes of Dell and Supermicro for delivery to Nvidia cloud partners, has since clarified that it has not done business with any of the companies incriminated in Singapore's probe.

The investigation has so far resulted in two Singaporeans and one Chinese national being charged with fraud on Feb 27.

Nvidia cloud partners are firms recognised by the AI chip giant. They provide software and hardware services to end users using Nvidia products.

On March 4, NationGate recovered about a quarter of the previous day's losses on the local bourse.