Singapore, 26 August 2024: Dr Lili Yan Ing, Senior Economist at ERIA and Secretary-General of the IEA, participated as a panelist in a webinar hosted by the National University of Singapore (NUS) titled ‘How Will Southeast Asia Navigate the US–China Chip Competition?’ The session was chaired by Dr Yongwook Ryu of the Lee Kuan Yew School of Public Policy at NUS. Other panelists included Manoj Harjani from RSIS, Nanyang Technological University, and Jassie Cheng from the Centre on Asia and Globalisation at NUS.

Cheng began by outlining the shifting semiconductor landscape, noting that Southeast Asia stands to benefit from the fallout of the US–China chip rivalry. She highlighted China’s struggle to achieve self-sufficiency, exacerbated by corruption and export restrictions, in contrast to Taiwan’s dominance in advanced chip production. Cheng observed a surge in investments from both Chinese and Taiwanese companies into Southeast Asia, driven by a desire to diversify and mitigate risks. She recommended that the region focus on deepening collaboration in research and development (R&D) and manufacturing to enhance its competitiveness in the global semiconductor market.

Dr Ing discussed how Southeast Asia’s semiconductor industry could benefit from the current geopolitical climate, with Singapore, Malaysia, and Viet Nam playing pivotal roles. She identified opportunities arising from the US–China tensions, noting the region’s increased exports and growing foreign investment as companies seek alternatives to China. Dr Ing sees the semiconductor sector as a collaborative regional production network, with each ASEAN country specialising in different stages of production. However, she cautioned that prolonged tensions could heighten risks and costs. To maintain a competitive edge, she suggested that ASEAN should focus on strengthening regional cooperation, investing in R&D, and enhancing digital infrastructure and integration across member countries.

Manoj emphasised the significant role of the chip industry in Singapore’s manufacturing sector, which accounted for nearly 40% of its value added in 2023. He noted that Singapore and Malaysia play complementary roles in the global semiconductor supply chain, with Singapore specialising in wafer fabrication and Malaysia in assembly, testing, and packaging. The region has benefited from increased investment due to US–China tensions, which has bolstered supply chain resilience. However, Manoj warned that expanding US export controls on chips could impact Singapore’s semiconductor industry. He also noted that talent migration from Malaysia to Singapore could become a concern as both nations strive to advance their positions in the semiconductor value chain.

Dr Lili Yan Ing's Presentation

Publication: ASEAN Digital Economy 2045

Publication: Economic Transformation and a New Economic Order