Overview

The semiconductor industry has emerged as a central pillar of ASEAN’s strategy to enhance regional resilience, competitiveness, and technological sovereignty. Recognizing the sector’s growing strategic importance, the ASEAN Business Advisory Council (ASEAN-BAC), through its policy brief “Strengthening ASEAN’s Semiconductor Future: Building a Resilient Regional Supply Chain,” has proposed the creation of an ASEAN Framework for an Integrated Semiconductor Supply Chain (AFISS). This initiative seeks to coordinate member states’ industrial capabilities and regulatory efforts to build a cohesive, end-to-end semiconductor ecosystem within Southeast Asia (ASEAN-BAC, 2024).

Supporting frameworks such as the Framework on ASEAN Supply Chain Efficiency and Resilience (2023) and the Master Plan on ASEAN Connectivity 2025 (MPAC 2025) further reinforce the region’s ambition to harmonize logistics, digital infrastructure, and trade facilitation measures (ASEAN Secretariat, 2024; ASEAN Connectivity, 2023). Together, these frameworks lay the groundwork for ASEAN’s evolution from a set of fragmented national industries into an integrated regional production network capable of competing globally.

Within this context, several ASEAN members have taken decisive steps to position themselves as key contributors to the regional semiconductor supply chain.

Vietnam, Malaysia, and Singapore stand out as leading examples, each bringing unique strengths to the table Vietnam with its rapidly growing manufacturing base and policy-driven innovation push; Malaysia with its mature testing, packaging, and design ecosystem; and Singapore with its advanced R&D capabilities and stable investment environment. These three economies illustrate how ASEAN can collectively transform its semiconductor ambitions into a tangible regional strategy anchored in complementarity rather than competition. The following sections highlight how each country is contributing to ASEAN’s broader vision of a resilient, interconnected semiconductor supply chain.

Vietnam: Building a Foundation for Growth

Vietnam has rapidly emerged as one of ASEAN’s most promising semiconductor markets. Vo Xuan Hoai, Vietnam Deputy Director of the National Innovation Center (NIC), stated that “the return of SEMIEXPO reflects Vietnam’s strong commitment to building a world-class semiconductor ecosystem. With bold policies, international cooperation, new investment in R&D and workforce development, Vietnam is laying the foundation for long-term growth” (VietnamPlus, 2024).

According to IMARC Group (2024), Vietnam’s semiconductor market generated USD 7.03 billion in 2024 and is projected to reach USD 16.64 billion by 2033, expanding at a compound annual growth rate (CAGR) of 9.3%. This growth is driven by rising demand for next-generation technologies such as IoT, AI, and 5G alongside strong government incentives. With a clear focus on assembly, testing, and packaging (ATP), Vietnam is gradually moving toward higher-value segments, including integrated circuit (IC) design and localized fabrication. Within the AFISS framework, Vietnam could serve as a cost-efficient manufacturing and innovation hub, supporting both regional and global supply chains (Ministry of Industry and Trade, 2024).

Malaysia: Developing Infrastructure, Talent, and Regional Integration

Malaysia remains one of ASEAN’s most mature semiconductor ecosystems, accounting for approximately 13 percent of global semiconductor testing and packaging (ASEAN Briefing, 2024). With long-standing strengths in assembly, testing, and design, the country is now expanding its focus to move further upstream in the value chain an essential step if ASEAN is to achieve full supply chain integration.

Without this infrastructure, ASEAN cannot realistically aspire to move upstream. Countries such as Malaysia, with its Kulim High-Tech Park and Penang’s “Silicon Valley of the East”, are laying the groundwork for higher-value production and regional collaboration (ASEAN Briefing, 2024). These clusters host both multinational corporations and homegrown innovators, supported by government incentives and academic partnerships that emphasize sustainable growth and technology transfer.

Malysia’s Prime Minister, Anwar Ibrahim emphasized the need for “stronger alignment between universities and industry,” calling on private companies to co-develop training, exposure, and curriculum design to meet rising global demand for semiconductor talent (OpenGov Asia, 2024). At the same time, Malaysia’s National Semiconductor Strategy (NSS) envisions Sarawak as an emerging innovation hub for AI and chip technology, supported by a RM3 billion expansion at Sama Jaya High-Tech Park (OpenGov Asia, 2024).

The private sector is complementing these efforts. Chin Yong Keong, CEO of Edelteq Holdings Berhad, stated that strategic partnerships such as their venture with Kumpulan Modal Perdana “aim to accelerate product development and position Malaysia as a key contributor to the next wave of semiconductor innovation” (TechNode Global, 2025). Likewise, Analog Devices Inc. (ADI) continues to expand in Penang. Its country director, Chia, affirmed that “talent is the key question everywhere, especially in semiconductors and electronics,” underscoring Malaysia’s commitment to building a robust talent pipeline (The Edge Malaysia, 2025).

Joint ventures and ASEAN-branded products can enhance visibility on the global stage, while initiatives such as Malaysia’s Engineering Talent for Semiconductor Industry (ETSI) Programme and emerging regional talent mobility frameworks help address the region’s human capital challenge (ASEAN Briefing, 2024). By combining talent development, infrastructure expansion, and cross-border collaboration, Malaysia demonstrates how ASEAN members can strengthen collective semiconductor capacity while ensuring inclusivity and long-term resilience.

Singapore: Leading with Technology and Stability

Singapore anchors ASEAN’s upstream semiconductor ecosystem, hosting global leaders such as GlobalFoundries, Micron, and Infineon. The semiconductor sector contributes around 6% of Singapore’s GDP and spans the entire value chain from IC design and wafer fabrication to packaging and testing (Singapore Economic Development Board [EDB], 2024).

The country’s competitive edge lies in its robust R&D infrastructure. Institutions such as A*STAR’s Institute of Microelectronics and NUS’s SHINE Centre lead cutting-edge research in heterogeneous integration and wide bandgap semiconductors, both essential for emerging technologies like artificial intelligence (AI) and electric vehicles (EVs) (EDB, 2024).

Ajit Manocha, President and CEO of SEMI, the global industry association representing semiconductor equipment and materials companies, highlighted that “this is a time of unprecedented opportunities. Singapore should advance its semiconductor strategy loudly and clearly, and other ASEAN nations should follow suit” (The Straits Times, 2025).With a stable regulatory framework, strong intellectual property protection, and a highly skilled talent base, Singapore serves as ASEAN’s technological and coordination anchor, enabling innovation, investment, and cross-border partnerships that strengthen the region’s position in the global semiconductor value chain.

ASEAN Synergy: Complementarity, Not Competition

ASEAN’s strength lies in its diversity. Each member state brings distinct capabilities that, when integrated, can form a complete regional supply chain. In this model:

• Vietnam drives cost-efficient assembly and testing.

• Malaysia specializes in packaging, automation, and inspection systems.

• Singapore leads in upstream design, fabrication, and R&D coordination.

Lai Wai Kit of EY-Parthenon emphasized that “the semiconductor pie is big enough for Singapore and Malaysia. Singapore supplements its regional counterparts to provide an attractive upstream base that benefits the entire Southeast Asian supply chain” (ThinkChina, 2025). Collaborations such as Vietnam - Singapore partnerships on semiconductor investments illustrate this synergy (Vietnam News, 2025). Within the AFISS framework, ASEAN could establish an integrated semiconductor corridor that connects innovation, production, and logistics across the region.

Conclusion and Strategic Recommendations

ASEAN’s semiconductor ambitions are gaining strong traction. Supported by policy frameworks like AFISS and MPAC 2025, the region is moving from fragmented capabilities to a more integrated, collaborative model. Vietnam, Malaysia, and Singapore currently lead in different stages of the value chain, creating a solid foundation for regional growth.

To sustain this momentum, other ASEAN members should identify and leverage their comparative advantages. Indonesia can capitalize on its abundant nickel and rare earth reserves by developing a transparent and sustainable materials strategy to secure regional access to critical inputs. Thailand can strengthen its automotive and precision machinery base to support semiconductor applications, particularly in the EV sector. The Philippines can expand its testing, design outsourcing, and electronics assembly capabilities, building on its skilled, English-speaking workforce. Meanwhile, Cambodia, Laos, and Myanmar can contribute through vocational training, logistics services, and renewable energy supply for semiconductor operations.

By aligning national strategies with regional objectives, ASEAN can emerge as a trusted global semiconductor supplier, enhancing resilience, competitiveness, and collective relevance in the global technology landscape.

References

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