KUALA LUMPUR, Jan 21 – Several Chinese-owned solar panel manufacturers in Malaysia have shut down or reduced operations due to US tariff hikes, Singapore’s Straits Times (ST) reported, citing industry sources.

The report said among the affected companies are Jinko Solar Co, Risen Energy Co, and JA Solar Technology Co, which together account for nearly 40 per cent of Malaysia’s total solar production capacity.

“Many of these firms initially invested in Malaysia to target the US market,” Chin Soo Mau, adviser to the Malaysian Photovoltaic Industry Association, was quoted saying.

“With higher scrutiny over the ownership of companies exporting solar panels to the US, and potential higher tariffs by Trump, their products will no longer be competitive in the US market,” he added, referring US’s newly inaugurated 47th president Donald Trump.

ST reported that Risen Energy Co has scaled down production in the past six months. The company entered Malaysia in 2021 with plans to invest over RM42 billion in its facility in Kulim, Kedah.

Meanwhile, Longi Green Energy Technology Co, which contributes more than 37 per cent of Malaysia’s solar capacity, has halted expansion plans after establishing three plants in Selangor and Sarawak.

ST also cited consultancy firm Wood Mackenzie saying China's solar firms dominate Malaysia's sector, making up nearly 80 per cent of the country's 23.6GW production capacity.

Most of Malaysia’s solar panels are exported to the US, with exports valued at nearly US$1.8 billion (RM8.1 billion) from January to September 2024.

In November last year, US trade officials announced a new round of tariffs on solar panel imports from four Southeast Asian nations after American manufacturers complained that companies there are flooding the market with unfairly cheap goods.

The group, the American Alliance for Solar Manufacturing Trade Committee, accused big Chinese solar panel makers with factories in Malaysia, Cambodia, Vietnam, and Thailand of causing global prices to collapse by dumping products into the market.

Most solar panels installed in the US are made overseas, and some 80 per cent of imports come from the four nations targeted in the Commerce Department probe.

The Biden administration had last year raised the alarm over China's massive investment in factory capacity for clean energy goods.