NEW DELHI– As geopolitical tensions reshape global supply chains, India and Southeast Asia are emerging as pivotal players in the semiconductor industry, challenging the long-standing dominance of Taiwan and China.
Supply chain disruptions and sanctions have pushed multinationals to diversify production into Malaysia, Vietnam, and India—markets offering competitive policy incentives, cost advantages, and increasingly skilled labor, according to an analysis published in One World Outlook by Jennifer Xiao.
Asia’s semiconductor market is projected to generate $466.52 billion in revenue in 2025, the largest regional share globally. While Taiwan, South Korea, and mainland China continue to lead, India, Southeast Asia, and Japan are quickly narrowing the gap through strategic government policies, foreign investment, and rapid adoption of advanced technologies.
India’s Push Into Chip Manufacturing
India’s semiconductor ambitions have shifted from aspiration to execution. Backed by $18 billion in investments across 10 projects, the country expects commercial chip production to begin by late 2025.
Government initiatives such as the Production Linked Incentive (PLI) scheme and the new Electronics Component Manufacturing Scheme are fueling this drive. India’s chip market, valued at $38 billion in 2023, is forecast to reach $50 billion by 2025 and could scale to $100–110 billion by 2030 if momentum holds.
Southeast Asia as a Back-End Hub
Southeast Asia, meanwhile, is becoming a global hub for back-end operations—assembly, testing, and packaging (ATP)—critical functions underpinning semiconductor production. Malaysia’s Penang region has gained prominence as an AI chip assembly hub, drawing record investments and spurring local GPU development initiatives. Vietnam and Thailand are also expanding their roles, making Southeast Asia a central pillar of global supply chain resilience.
Asia’s Competitive Strengths and Challenges
The region’s strengths extend beyond scale. Asia benefits from dense ecosystems of fabs, suppliers, research institutes, and multinational customers that foster efficiency and innovation. Industry giants such as TSMC, Samsung, Intel, and Infineon continue to invest heavily across the region, supporting both advanced-node manufacturing and specialized back-end capabilities.
At the same time, tailored government incentives, R&D support, and preferential tax regimes are bolstering competitiveness while creating a pipeline of skilled talent.
Yet challenges remain. Shortages of skilled workers, rising wage pressures, infrastructure constraints, and exposure to trade restrictions or tariff wars—issues underscored by Malaysia—could hinder growth. Analysts note that sustained investment in education, research, and supply chain security will be crucial for Asia to solidify its role as the world’s semiconductor hub. (Source: IANS)
