Since the launch of the Trump administration's second term, uncertainty surrounding tariffs has dampened semiconductor corporations' capital investment. In this context, the Southeast Asia region has gained attention as a key area in the 'post-Trump' era. Considering the nature of semiconductor manufacturing plants, which typically begin full operations 3 to 4 years after investment starts, it is analyzed that global semiconductor corporations are planning to restructure their supply chains around Southeast Asia in anticipation of the period following the Trump administration.
According to a recent report by the International Semiconductor Equipment and Materials Association (SEMI) on the 13th, the Southeast Asia region is increasingly playing a critical role in the global supply chain, with advantages such as low labor costs, geographical location, and government support policies. In particular, it is rapidly increasing its presence in the assembly, test, and packaging (ATP) sectors, and is actively entering the semiconductor investment competition using strategies led by the government, tax incentives, and low production expenses.
Malaysia, where corporations like Intel, Broadcom, and Micron have already expanded, is emerging as one of the global supply chain hubs in Asia. Malaysia accounts for 13% of the global semiconductor back-end processes and is one of the semiconductor supply chain hubs. Global corporations such as Intel and Infineon are currently making large-scale investments, and the Malaysian government aims to attract over $100 billion (approximately 136 trillion won) in investments by the end of this year.
Intel has established back-end assembly lines in Malaysia for a long time and is making additional investments to set up advanced packaging plants. Micron also established its second assembly and test facility in Penang, and Texas Instruments (TI) is building production facilities in Malaysia with an investment of $3.1 billion (approximately 4 trillion won). Infineon, a powerhouse in the automotive semiconductor market, is establishing a silicon carbide (SiC) power semiconductor manufacturing and packaging plant in Penang, while Broadcom is engaged in packaging and component manufacturing through the local company Inari.
ARM, which has declared direct manufacturing as well as semiconductor design, has chosen Malaysia as its first production base. In March, the Malaysian government agreed to pay ARM a royalty of $250 million over 10 years and to provide semiconductor design intellectual property rights (IP) for its own semiconductor production. Mohammad Raphid Ramli, the Minister of the Economy in the Prime Minister's Office, noted, 'We wanted the center of Malaysia's semiconductor industry to shift from back-end processes like testing to front-end processes,' adding, 'To achieve this, we chose a radical approach to collaborate with ARM.'
Singapore's semiconductor industry accounts for about 6% of its gross domestic product (GDP) and handles 20% of global semiconductor equipment production. Micron is currently upgrading its facility in Singapore to produce advanced high-bandwidth memory (HBM), and GlobalFoundries is also expanding its production lines. Additionally, TSMC subsidiary Vanguard (VIS) and NXP announced last June that they would establish a joint venture in Singapore and invest $7.8 billion (approximately 10.7 trillion won) to construct a semiconductor wafer plant. The Singapore government has also expressed plans to invest $13.6 billion for R&D and talent development.
Vietnam is emerging as a new powerhouse in semiconductor assembly and testing. The semiconductor market size has increased by 41%, growing from $10.62 billion in 2016 to $15.01 billion in 2023. Emcore, a leader in back-end processes, is operating a plant and is targeting semiconductor exports of $10 billion. The Vietnamese government is also investing in talent development, implementing a program worth $1 billion to train about 50,000 semiconductor engineers.
A semiconductor industry official said, 'Because semiconductor facility investments are generally made over a long horizon, relocating production sites or building new plants in response to Trump tariffs is not realistic,' and explained, 'Since U.S. semiconductor regulations against China will continue, Southeast Asian countries, which have low labor costs and a developed workforce and ecosystem, have become the safest option.'