Kuala Lumpur, 24 October 2025: ERIA convened the ASEAN Semiconductor Business Dialogue on U.S. Trade Policy in Kuala Lumpur, gathering government representatives, business leaders, and industry experts to discuss strategies for enhancing ASEAN’s competitiveness and resilience amidst shifting global trade dynamics.

Dr Dionisius Narjoko, Senior Economist at ERIA, and Ms Anna Robeniol, Senior Policy Fellow at ERIA, moderated the sessions, fostering exchanges between policymakers and industry leaders on how ASEAN can strengthen its position in the global semiconductor value chain.

Building Resilience in ASEAN’s Semiconductor Ecosystem
In his opening remarks, ERIA President Tetsuya Watanabe underscored ASEAN’s strategic role in the global semiconductor supply chain and the importance of moving beyond assembly and testing towards higher-value activities. He noted that evolving US trade and industrial policies bring both challenges and opportunities, making it crucial for the region to build supply chain resilience and enhance competitiveness.

President Watanabe called for a value-chain–driven industrial strategy, developed in close partnership with industry stakeholders, that promotes regional complementarity, talent development, and quality job creation. He expressed confidence that the dialogue would help advance ASEAN’s geoeconomic agenda and strengthen collaboration across the semiconductor ecosystem.

Semiconductors Powering ASEAN’s Innovation Economy
In the first session, Dr Han Phoumin, Senior Energy Economist at ERIA, highlighted the central role of semiconductors in driving technological innovation across artificial intelligence (AI), electric vehicles (EVs), and the Internet of Things (IoT). He projected that global semiconductor demand will continue to grow at double-digit rates and identified ASEAN’s comparative advantages in midstream and downstream production.

To move further up the value chain, Dr Phoumin emphasised the need to strengthen upstream capabilities in chip design and fabrication through targeted investments in talent development, infrastructure, and policy harmonisation. He proposed an ASEAN Framework for Integrated Semiconductor Supply Chain (AFISS) to coordinate regional strategies and promote cross-border collaboration.

Harnessing FDI, Critical Minerals, and Rules of Origin
Participants discussed how ASEAN could balance foreign direct investment (FDI) with domestic capability development. While FDI remains vital for capital inflows and technology transfer, speakers agreed that long-term competitiveness will depend on nurturing local innovation and skilled human resources. Representatives from Malaysia, Viet Nam, and the Philippines shared ongoing initiatives to strengthen national talent pipelines and research ecosystems.

The dialogue also explored ASEAN’s opportunities in critical minerals, essential for semiconductor manufacturing. Ms Anna Baweh of Intel Malaysia noted that ASEAN should go beyond raw material exports by investing in refining and processing capabilities for nickel, cobalt, and copper. She underscored the importance of adopting transparent and sustainable mining practices to support responsible growth.

Discussions further addressed the impact of tariff escalation and rules of origin on regional trade. Ms Baweh observed that shifting trade rules and retaliatory tariffs can disrupt supply chains, while Ms Robeniol highlighted that ASEAN’s free trade agreements allow flexibility through ‘substantial transformation’ criteria to preserve market access and tariff benefits.

Regional Coordination and Human Capital Development
In closing, H.E. Mari Elka Pangestu, Vice Chairperson of Indonesia’s National Economic Council, stressed that ASEAN must diversify trade partnerships, harmonise rules of origin, and enhance coordination to ensure long-term supply chain resilience.

Participants reaffirmed their commitment to deepening regional cooperation, investing in human capital, and advancing innovation. The dialogue concluded with a shared vision for ASEAN to play a leading role in shaping the global semiconductor landscape amidst evolving trade and industrial policy shifts.