AI demand has lifted Southeast Asia’s microchip exports to record levels, but Southeast Asia holds the back end of the supply chain, where each microchip earns the least.
World microchip sales reached US$702bn in the first half of 2026, up 102% on a year earlier. Southeast Asia has assembled and tested microchips since Texas Instruments and Fairchild opened plants in Singapore in 1968 and 1969, and Southeast Asia shares that layer of the chain with China and Taiwan.
AI demand has lifted Southeast Asia’s microchip exports to record levels in 2026, but Southeast Asia still holds the back end of the supply chain, where each microchip earns the least, and shares that layer with China and Taiwan.
The Assessment examines the semiconductor industry in the eleven ASEAN markets. Malaysia, Vietnam, the Philippines, Singapore and Thailand hold measurable positions in the microchip supply chain, and Indonesia, Cambodia, Laos, Myanmar, Brunei and Timor-Leste publish no national measure of microchip production. Samsung in Vietnam serves as the case study, since the gains and risks of dependence on one company are most visible there. MERIDIAN makes three dated calls for the period to 31 December 2027 and scores each call in public on 1 April 2027, 1 October 2027 and 31 December 2027.
World microchip sales reached US$702bn in the first half of 2026, and Southeast Asia has held the assembly, test and packaging layer of the supply chain since 1968.
Malaysia leads Southeast Asia in microchip exports, Vietnam leads in broad electronics exports, and Singapore hosts most of Southeast Asia’s wafer fabrication.
Drivers: AI demand drives most of the export growth in 2026, United States trade measures favour Southeast Asia over China, and diversification adds a smaller share of new work.
Samsung’s four Vietnamese subsidiaries earned revenue equal to 13% of Vietnam’s exports in 2025, and Samsung’s profits come mainly from memory microchips made outside Vietnam.
Constraints: engineers, electricity, water and slow approvals limit Southeast Asia’s microchip industry more than capital does, and no ASEAN government publishes the value of spent microchip investment against approvals.
Obstacles: India approved a second microchip mission of ₹1.27 trillion (US$13.3bn) in July 2026, and the United States confirmed a second phase of microchip tariffs that exempts companies building plants in America.
Four of MERIDIAN’s five analytical lenses find that capital reaching Southeast Asia lags capital announced, and the human-capital lens finds that engineers may limit growth first.
Each ASEAN government with a microchip industry uses a different main policy tool, and ASEAN’s regional semiconductor framework sets voluntary principles without a plan of action.
MERIDIAN expects AI demand to keep Southeast Asia’s microchip exports rising through 2027, Southeast Asia’s share of the boom’s value to shrink, and United States microchip tariffs to reach Southeast Asian plants before the end of 2027.
Recommendations: ASEAN governments should turn the regional framework into a plan of action and publish spent investment and working engineers, and investors should time new commitments around United States tariff notices.
The full report sets out the evidence, sources and computations behind each finding.
The full report is released on 16 October 2026.
The full report is open to download.
Leave your email now. We send you a link straight away, and the link opens the full 61-page report from 16 October 2026.
Leave your email and we send you the link to the full 61-page report.
Signed in. Every report, chart and image download on aseanx is open.
Download the report →