Are India and Southeast Asia Emerging as Powerhouses in the Chip Industry?
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Synopsis
As global demand for semiconductors surges, India and Southeast Asia are emerging as pivotal players in the industry. With substantial investments and strategic policy shifts, these regions are set to challenge traditional powerhouses. Discover how they aim to reshape the global semiconductor landscape and what challenges lie ahead.
Key Takeaways
- Southeast Asia and India are emerging as critical players in the semiconductor industry.
- Asia's semiconductor market is projected to reach $466.52 billion by 2025.
- India’s semiconductor ambitions include $18 billion in investments and commercial production by 2025.
- Southeast Asia excels in back-end operations crucial for the industry.
- Challenges such as labor shortages and infrastructure gaps need to be addressed.
New Delhi, Sep 25 (NationPress) The need to diversify supply chains amid geopolitical uncertainties has thrust Southeast Asia and India into the spotlight of the semiconductor sector.
The heavy dependence on Taiwan and China, revealed by recent disruptions and sanctions, has led global firms to establish bases in Malaysia, Vietnam, and India. These countries now provide cost advantages, competitive policy incentives, and a growing pool of skilled labor, as noted in a recent article.
Forecasts indicate that Asia's semiconductor market will reach $466.52 billion by 2025, making it the largest regional market globally. While established manufacturing leaders—Taiwan, South Korea, and mainland China—remain dominant, Southeast Asia, India, and Japan are rapidly narrowing the gap through strategic policy changes, foreign investments, and accelerated technology adoption, according to Jennifer Xiao's piece in One World Outlook.
India's semiconductor vision is shifting from mere aspirations to tangible actions. With commercial chip production expected to commence by late 2025, underpinned by $18 billion in investments across 10 initiatives, India is strategically utilizing government incentives like the Production Linked Incentive (PLI) scheme and the newly approved Electronics Component Manufacturing Scheme to cultivate manufacturing self-reliance and global integration. This strategy has resulted in a market growth forecast from $38 billion in 2023 to as high as $50 billion by 2025, with an ambitious target of $100–110 billion by 2030, contingent on sustained execution.
Meanwhile, Southeast Asia is gaining prominence for its crucial role in back-end operations—assembly, testing, and packaging (ATP)—that are essential to the industry. Malaysia's Penang has emerged as a hub for AI chip assembly, attracting record investments and government support for local GPU development. Vietnam and Thailand are also enhancing the region's capacity and export-oriented strategies, positioning Southeast Asia as a cornerstone of global chip supply resilience.
The article posits that Asia is poised to become a global semiconductor production hub, driven by soaring demand for chips across sectors like electric vehicles, electronics, and telecommunications.
Asia's advantages extend beyond sheer scale. The region boasts mature ecosystems—a convergence of leading-edge fabs, supplier networks, research institutions, and global clients working in concert for efficiency and innovation. Ongoing investments from industry leaders such as TSMC, Samsung, Intel, and Infineon are enhancing both front-end advanced node manufacturing and back-end specialization. Moreover, tailored government incentives, R&D support, and favorable tax regimes are enhancing competitiveness and fostering talent development, the article notes.
However, challenges remain. Issues such as skilled labor shortages, rising wage pressures, infrastructure deficiencies, and susceptibility to trade restrictions or tariff conflicts (as pointed out by Malaysia) could hinder progress. Addressing these challenges requires disciplined investments in education, R&D, and supply chain security—Asia's success will hinge as much on effective execution as on high-profile announcements.
Point of View
It's crucial to recognize that the semiconductor landscape is shifting significantly. India and Southeast Asia are not only diversifying their supply chains; they are also making strategic investments to become global leaders in semiconductor manufacturing. This development is essential for national interests and economic resilience. However, it is equally important to address the challenges that come with this ambitious growth trajectory.
NationPress
25/09/2025
Frequently Asked Questions
What is driving the growth of the semiconductor industry in India and Southeast Asia?
The growth is primarily driven by the need to diversify supply chains away from over-reliance on Taiwan and China, along with substantial investments and supportive government policies.
What are the challenges facing the semiconductor industry in these regions?
Challenges include skilled labor shortages, rising wage pressures, infrastructure gaps, and exposure to trade restrictions or tariff wars that could impede progress.
What investments are being made in India's semiconductor sector?
India is set to invest $18 billion across 10 projects, with hopes of starting commercial chip production by late 2025.
How does Southeast Asia contribute to the global chip supply chain?
Southeast Asia plays a critical role in back-end operations such as assembly, testing, and packaging, essential for the semiconductor industry.
What is the forecast for Asia's semiconductor market?
Revenue projections for Asia's semiconductor market are estimated to reach $466.52 billion by 2025, making it the largest regional share globally.
