“ASEAN is striving to develop the semiconductor industry, aiming for leadership and deeper integration into the global value chain”
ASEAN leads the semiconductor industry
Development potential
INTRODUCTION
The semiconductor industry is becoming a key factor in shaping global economic advantages. In this context, ASEAN is emerging as a region with immense potential to lead and develop this sector. Deeper participation in the global semiconductor value chain not only brings economic benefits but also strengthens the region’s strategic position on the global technology map.
Figure 1: ASEAN leaders at a dialogue session with AIPA representatives on October 9-10 in Laos (Source: Internet)
ASEAN’s Potential in the Semiconductor Industry
First, ASEAN possesses a young and abundant workforce, forming a strong foundation for the development of the semiconductor industry. Countries like Malaysia, Vietnam, and Thailand have heavily invested in education and training, especially in STEM fields, to prepare a high-quality workforce. This makes the region an attractive destination for international investors in high-tech industries.
Furthermore, ASEAN’s strategic geographic location, positioned between major markets such as China, India, and Japan, facilitates trade and international cooperation. This not only helps reduce transportation costs but also enhances market access, boosting the growth of the semiconductor industry in the region.
Figure 2: The developing semiconductor industry
LEADING ASEAN COUNTRIES IN THE SEMICONDUCTOR INDUSTRY
Singapore: The Region’s Semiconductor Hub
Singapore serves as a key semiconductor production hub, with a complete manufacturing chain from design to chip testing. Major companies like ST, Infineon, MediaTek, Micron, ASE, and JCET have established manufacturing facilities here.
Micron has its global headquarters and three semiconductor plants, along with assembly and testing facilities in Singapore. Infineon has its regional headquarters here, overseeing R&D, supply chain management, and marketing. GlobalFoundries and UMC both operate 40nm chip fabrication plants in Singapore. Global semiconductor manufacturers have invested nearly $200 billion in the country. GlobalFoundries has invested $4 billion to expand capacity to 1.5 million 300mm wafers per year, while UMC has invested $5 billion in 22nm and 28nm chip manufacturing to serve 5G and electric vehicle demand.
Figure 3: The semiconductor industry in Singapore
Malaysia: Strengthening Its Regional Position
Malaysia continues to affirm its position in the semiconductor industry. According to HSBC, Malaysia has gained significant market share in several semiconductor segments due to steady technological investment from the US and Europe. Specifically, the country captured nearly 45% of the integrated circuit (IC) segment within a year, along with a 10% share in processor and amplifier chips.
Penang Island has become a crucial hub for semiconductor manufacturing, attracting multinational technology giants such as Intel, Micron, and Infineon. This growth not only contributes to Malaysia’s economic expansion but also reinforces ASEAN’s role in the global semiconductor supply chain.
Figure 4: The semiconductor industry in Malaysia
Vietnam: A Strong Competitor and Potential Partner
Vietnam is emerging as a strong competitor in the semiconductor sector. The Vietnamese government has demonstrated its commitment to boosting this industry through the “Development of Semiconductor Industry Human Resources by 2030, with Vision to 2050” initiative. This initiative focuses on investing in education and training, especially in STEM programs, to build a high-quality workforce for the semiconductor industry.
Moreover, Vietnam is actively collaborating with international partners, particularly Japan, to develop its semiconductor sector. The Japanese Ministry of Economy, Trade, and Industry has announced a plan to invest over $10 billion in this field, opening up significant cooperation opportunities for Vietnam.
Figure 5: The semiconductor industry in Vietnam
Thailand: Attracting Semiconductor Investments
Thailand is actively attracting investment in the semiconductor sector amid escalating US-China trade tensions. The Thai Board of Investment (BOI) plans to finalize a semiconductor industry strategy within the next 90 days and hire a consultancy firm to develop a roadmap for this sector.
Thailand aims to attract approximately 500 billion baht (equivalent to $14.7 billion) in semiconductor investments by 2029, focusing on power electronics. Companies such as Analog Devices, Sony, Toshiba, and Infineon are already present in Thailand, demonstrating the country’s strong growth potential in the semiconductor sector.
Figure 6: The semiconductor industry in Thailand
Bac Ninh, Vietnam: A Key Investment Destination
Bac Ninh continues to solidify its position as the leading province in attracting foreign investment. In January 2025, the province attracted $1.42 billion in registered capital, accounting for 32.2% of the country’s total and increasing sixfold compared to the same period last year. This growth highlights Bac Ninh as an attractive destination for high-tech investors, particularly in the semiconductor industry.
Figure 7: High-tech Semiconductor Factory: Amkor Bac Ninh
Regional and international cooperation: the key to development
ASEAN countries recognize that regional and international cooperation is crucial for driving the growth of the semiconductor industry. The ASEAN Business Advisory Council (ASEAN-BAC) has proposed enhancing public-private partnerships and encouraging investment in research and development, particularly in artificial intelligence.
Efforts to remove trade and investment barriers and strengthen intellectual property protection have also been suggested to create a favorable environment for industry development.
OPPORTUNITIES AND CHALLENGES IN ASEAN’S SEMICONDUCTOR INDUSTRY
The semiconductor industry is becoming a crucial driver of the global digital economy. With its advantages in workforce, geographic location, and investment-friendly policies, ASEAN has the potential to become a major semiconductor manufacturing and development center. However, the region also faces several challenges.
Opportunities for ASEAN’s Semiconductor Industry
Growing Global Demand
The rapid expansion of artificial intelligence, electric vehicles, and 5G technology is driving demand for semiconductors. ASEAN has the opportunity to integrate deeper into the global supply chain as international companies seek diversification beyond China.
Investment Incentives and Foreign Investment Attraction
Countries like Malaysia, Vietnam, and Thailand have introduced numerous policies to support the semiconductor industry. Malaysia has become a chip processing hub, Vietnam is developing IC design capabilities, and Thailand is focusing on attracting semiconductor manufacturers.
Abundant Workforce and Competitive Costs
ASEAN has a young labor force and lower labor costs than developed nations. Many countries in the region are investing heavily in workforce training in STEM fields to meet industry demands.
Strategic Positioning in the Global Supply Chain
With its favorable geographic location near major markets like China, Japan, and India, ASEAN is becoming a critical link in the global semiconductor supply chain, especially as US and European companies seek to expand production beyond China.
Challenges for ASEAN’s Semiconductor Industry
Lack of a Complete Supply Chain
Currently, ASEAN countries primarily engage in chip processing and assembly, while high-value stages like chip design and wafer manufacturing remain in the US, Taiwan, and South Korea. To compete, ASEAN needs to invest more in these higher-value stages.
Competition from Other Regions
Beyond China and India, countries like Mexico and Brazil are also investing in the semiconductor industry. This adds competitive pressure on ASEAN in attracting foreign investment and improving production quality.
Infrastructure and Technological Limitations
Developing the semiconductor industry requires modern infrastructure, including advanced manufacturing facilities and a stable power supply. Some ASEAN countries still face challenges in energy, logistics, and production processes, limiting industry growth.
Shortage of High-Skilled Talent
Although ASEAN has an abundant labor force, the number of highly skilled engineers and specialists in the semiconductor industry remains low. Attracting talent and training a deep-skilled workforce is a major challenge.
Geopolitical and Trade Policy Risks
The semiconductor industry is heavily influenced by trade policies and geopolitical tensions among major powers. Changes in US and Chinese policies could impact supply chains in ASEAN, making long-term strategic planning difficult.
CONCLUSION
The semiconductor industry plays a crucial role in driving ASEAN’s economic and technological development. With its existing potential, coupled with appropriate development strategies and strong collaboration among member countries, ASEAN has the capability to lead and become a key player in the global semiconductor value chain. This will not only bring economic benefits but also enhance the region’s position on the international stage.
(Vn-Industry.)
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