SEMICON Southeast Asia 2024 opens next week to gather players from across the regions electronics ecosystem to explore new opportunities.
Over the past two decades, Southeast Asia’s semiconductor industry has experienced remarkable growth. Regions including Malaysia, Singapore, Vietnam, Thailand, and the Philippines have emerged to bring unique strengths to the global semiconductor industry and today play key and growing roles in the manufacture of the chips that power the electronic devices that are so important in our daily lives.
The electrical and electronics (E&E) industry in Malaysia produces 13% of global back-end semiconductors, driving 40% of the nation’s export output and contributing about 5.8% to the country’s GDP in 2023. The region is courting more investment in its semiconductor value chain, whilst also establishing its presence in chip assembly, packaging, and testing as well as electronics manufacturing services.
Malaysia’s New Industrial Master Plan (NIMP) 2030 aspires to develop more front-end capabilities such as integrated circuit design, wafer fabrication, semiconductor machinery, and equipment manufacturing. Recently, Malaysia introduced two IC design parks in Selangor and Penang to elevate the country's global standing in design, foster economic growth, anc create high-value jobs. The Selangor IC Design Park will enhance Malaysia's position in the global industry, while the new 1 million square feet IC design and digital park in at the Bayan Lepas Industrial Park in Penang highlights the state's commitment to innovation, industry growth, and talent attraction.
Singapore has positioned itself as a key player in the global market and is now a hub for semiconductor manufacturing, attracting major companies and cultivating a diverse ecosystem. The region accounts for approximately 11% of global semiconductor market share, and about one-fifth of global semiconductor equipment manufacturing. Year after year, Singapore has been ramping up its capabilities to become a pivotal player in the global semiconductor industry.
Gearing up for substantial growth with a projected valuation of USD20-30 billion by 2030, Vietnam is positioning itself as a reliable partner and a crucial link in the global value chain with a focus on innovation and technology-driven growth. For its part, Thailand, which recorded a total investment of 800 billion baht in semiconductor production in 2023, offers a robust infrastructure and skilled workforce, giving the region a competitive advantage in the industry.
The semiconductor industry in Philippines is expected to grow 10-15% annually from 2024-2027, driven by increasing global demand for innovative technology in spaces such as manufacturing, research and development, design and testing.
Clearly, the chip industries in these regions and the Southeast Asian ecosystem as a whole are showing strong growth potential.
In recent years, geopolitical tensions have reshaped the global economic landscape and motivated many companies to explore expansion and collaboration opportunities beyond their borders. Southeast Asia has emerged as a prime beneficiary of this shift, with its strategic location, skilled workforce, and robust infrastructure, making it an attractive destination for electronics manufacturing and investment. However, for Southeast Asia to fully capitalize on this opportunity, industry players across region must work together as a cohesive ecosystem.
Collaboration among Southeast Asian countries is crucial for several reasons. Firstly, by pooling its resources, knowledge, and capabilities, the region can attract more investment. Companies considering establishing or expanding operations in the region need a diverse talent pool, robust supply chains, and supportive regulatory frameworks. By working together, the industry can ensure that Southeast Asia offers investors the stability and reliability they seek.
Secondly, collaboration enables companies across the industry to better leverage each other's strengths and address shared challenges more effectively. For example, by sharing best practices in workforce development and upskilling initiatives, the region can ensure labor forces remain competitive in an increasingly digital and automated industry. Similarly, by collaborating on research and development projects, companies can help drive innovation and technological advancement across the region.
But fostering collaboration among Southeast Asian countries is not just about attracting foreign investment; it is also about building resilience and sustainability within the region’s own economies. By working together to enhance technological capabilities, diversify supply chains, and develop local talent, chip companies in the region can strengthen not only the ecoysystem’s resilience but their collective competitiveness in the global market.
However, for collaboration to be successful, all stakeholders – including governments, industry associations, educational institutions, and businesses – must be committed and engaged. The industry must establish platforms for dialogue, knowledge sharing, and joint initiatives that facilitate cooperation and foster a culture of collaboration across borders.
At SEMICON Southeast Asia 2024 next week (May 28-30) at MITEC in Kuala Lumpur, Malaysia, discussions on collaborations amongst Southeast Asia players will take precedence in the spirit of elevating the region’s position in the global value chain. The event will feature forums that delve into the various Southeast Asia chip sectors and industry trends, as well as roundtable discussions on the importance of collaborative efforts amongst industry players.
The future of Southeast Asia's electronics industry hinges on its ability to collaborate, innovate, and adapt to a rapidly evolving global landscape. By working together, sharing knowledge and capabilities, and cultivating an environment that is conducive to investment and innovation, the industry can position Southeast Asia as a leading hub for electronics manufacturing and technology development.
Linda Tan is President of SEMI Southeast Asia.