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Will ASEAN Countries Be Able To Stop China And The US?
A Vietnamese company, Amkor Technology, is a global leader in outsourced semiconductor assembly and testing. In late 2023, they opened a state-of-the-art facility in Bac Ninh, Vietnam. The factory is projected to employ around 10,000 employees at full capacity, a sign that Southeast Asia, particularly Vietnam, Thailand, and Malaysia, are rapidly growing their chip-making capabilities and becoming a key player in the global semiconductor race. As the race between countries like China and the US intensifies, ASEAN countries are poised to make a big impact with their semiconductor-making capabilities.
Growing Importance Of ASEAN
The global semiconductor market is a battleground for technological supremacy, especially in AI, electric vehicles (EVs), and telecommunications industries. For years, countries like the U.S., South Korea, and Taiwan dominated the scene, with over 90% of market share. But in recent years, nations like Malaysia, Vietnam, and Thailand have made tremendous strides, positioning themselves as key players in the global semiconductor race. According to 2023 data, ASEAN’s semiconductor exports reached over $165 billion, a gigantic leap from $52.3 billion in 2017.
ASEAN’s advantages are multifaceted. The region boasts growing manufacturing capabilities, competitive labour costs, a burgeoning skilled workforce, and government policies designed to attract foreign investment. Moreover, ASEAN countries comprise some of the world’s fastest-growing economies, making them a haven for FDI(Foreign Direct Investment). Countries like Vietnam, Thailand, India and Malaysia are quickly climbing the ranks, attracting significant foreign direct investments from global semiconductor giants. In 2021 alone, FDI in ASEAN in electronics, including semiconductors, grew by 42%, highlighting the region’s increasing prominence in the global supply chain.
A Rising Semiconductor Powerhouse
Vietnam has long been the preferred location for tech companies like Intel and Renesas, which has helped the nation emerge as a leader in semiconductor technology. Companies like Intel and Renesas started their operations in the country in the late 2000s and over the last two decades, Vietnam has seen extensive FDI from numerous American, South Korean and Taiwanese companies. Today, Vietnam houses facilities for global giants such as Intel, Samsung, Marvell, and Qualcomm, making them a leader in the semiconductor manufacturing race. This can significantly benefit the economy of the nation as the demand for semiconductors is at an all-time high, and it is only going to go up from here. The Vietnamese government, aware of the sector’s strategic importance, has set ambitious goals. By 2030, Vietnam aims to train 50,000 semiconductor engineers, ensuring a steady stream of talent to support the industry’s expansion.
A Hub For ATP Services
Another player poised to make a big difference is Malaysia. Its role in the semiconductor race is nestled in its expertise in assembly, testing, and packaging or ATP services. Home to global players such as Infineon, Micron, and Broadcom, Malaysia has long been a key hub for semiconductor production. In 2022, Malaysia accounted for 7% of the global semiconductor market share, a testament to its strong foothold in the industry.
In 2023, the SEMICON Southeast Asia event, held in Kuala Lumpur, highlighted the potential of Malaysia as a semiconductor leader. Themed “Boosting Agility and Resiliency of the Global Electronics Supply Chain,” the event attracted over 500 companies, underscoring the region’s growing influence. As global semiconductor demand continues to grow, Malaysia is well-positioned to capture a larger share of the market.
Poised For Growth
Thailand’s semiconductor industry may not yet be as developed as Vietnam’s or Malaysia’s, but the country is doing everything possible to catch up. In 2023, Thailand recorded 800 billion baht ($22.7 billion) in semiconductor production investments, with most major global companies setting up facilities in the country. As the world’s electronics supply chains continue to shift, Thailand’s strategic location, skilled workforce, and growing infrastructure make it an attractive destination for semiconductor companies looking to relocate. The Thai government is also actively promoting workforce development, offering tax incentives, and encouraging public-private partnerships to strengthen the local semiconductor industry.
A New Contender
India is no stranger to climbing on trend trains. As a result, India, one of the fastest-growing economies, is now positioning itself as a key player in the global semiconductor race. In 2021, India launched its Semiconductor Mission with an aim to become a global hub for semiconductor design and manufacturing. The Indian government has committed $10 billion to attract investments in chip manufacturing, display fabrication, and semiconductor research.
More Competition, More Innovation
As more countries join this exclusive club, innovation in the industry has accelerated, and various companies and governments are spending billions of dollars to gain a competitive edge over the others. This can significantly affect the world and make technology even more accessible than ever before.
