Petaling Jaya, 24 July 2025: Amidst intensifying geopolitical competition and rising demand for next-generation technologies, ERIA President Tetsuya Watanabe called on ASEAN countries to deepen regional integration and strategically position themselves within the global semiconductor value chain.

Delivering the keynote address at the ASEAN Semiconductor Summit 2025 in Kuala Lumpur, President Watanabe highlighted the urgent need for coordinated action as the region navigates shifting global dynamics. The summit, hosted by the Malaysia Semiconductor Industry Association (MSIA), brought together prominent policymakers – including Malaysian Prime Minister Anwar Ibrahim – alongside industry leaders and research institutions to discuss Southeast Asia’s evolving role in one of the world’s most critical industries.

In his speech, titled ‘Reshaping the Industry and Enhancing the Regional Integration of the Semiconductor Supply Chain in ASEAN’, President Watanabe underscored how accelerating digitalisation and the green transition are driving surging global demand for semiconductors.

‘These chips are the foundation of AI, electric vehicles, and advanced data infrastructure,’ he said. ‘The global semiconductor industry is forecast to reach US$1 trillion by 2030.’

While ASEAN countries have gained prominence in downstream activities such as assembly, testing, and packaging (ATP), President Watanabe emphasised that location alone is not enough to secure supply chain resilience in today’s complex geopolitical climate.

‘ASEAN is part of this recalibration [of supply chains due to rising US–China tensions], but success hinges on more than geography,’ he noted. ‘It requires stronger industrial capacity, deeper cross-border collaboration, and enhanced regional coordination.’

President Watanabe introduced ERIA’s work that supports one of ASEAN’s Priority Economic Deliverables (PEDs) this year called the ASEAN Framework for Integrated Semiconductor Supply Chain (AFISS). The Framework aims to position ASEAN not just as a beneficiary of shifting global supply chains, but as a central and trusted hub in the semiconductor ecosystem.

Participating in a high-level panel with senior officials and industry executives, President Watanabe challenged the ‘illusion of full reshoring,’ arguing that the complexity and capital intensity of semiconductor production make complete onshoring strategies unrealistic.

‘Countries like Malaysia, Viet Nam, and increasingly Thailand and the Philippines already play vital roles – not just in back-end processes but also in embedded design and specialty materials,’ he said. ‘Rather than pure reshoring, we are seeing a shift towards friendshoring – and ASEAN stands to benefit, provided the fundamentals are in place.’

He cautioned, however, that ASEAN’s strategic advantage is not immune to external pressures. Export controls, tariffs, subsidies, and geopolitical shifts are introducing new uncertainties into the global semiconductor landscape.

‘For ASEAN, this means making more complex investment decisions, navigating overlapping regulations, and responding quickly to evolving policy signals from major economies,’ he warned.

Despite these challenges, President Watanabe framed the current moment as a window of strategic opportunity. With greater investment in skills development, infrastructure, and institutional reform – underpinned by regional cooperation – ASEAN could emerge as a ‘stabilising node’ in an increasingly fragmented world.

‘This is something ASEAN is already very good at,’ he concluded. ‘If we can translate that stability into strategic coherence, ASEAN will not only remain relevant – but also become indispensable.’