Experts see Southeast Asia upping their game in chip assembly, packaging
China, Taiwan and Korea will continue to dominate back-end chip manufacturing.
Emerging manufacturing hubs in Southeast Asia are poised to significantly increase their semiconductor assembly, testing, and packaging (ATP) capacity over the long term, according to the Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG)
In a joint report titled “Emerging Resilience in the Semiconductor Supply Chain,” SIA and BCG said the region already accounted for nearly 20% of the world’s ATP capacity in 2022 with a large concentration in Malaysia (7%) and the Philippines (6%).
The region’s market share is forecasted to grow to nearly 27% of the global ATP capacity by 2032 with emerging hubs like Vietnam playing catch up.
Malaysia will likely retain its lead with a 9% market share while Vietnam is estimated to grow its ATP capacity to 8% of the global capacity by 2032, from less than a 1% market share in 2022. The Philippines’ market share, meanwhile, is expected to dip to 5%.
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Despite the catch-up, SIA and BCG said the global ATP market will continue to be dominated by the big players in East and Northeast Asia considering they already host the majority of world’s existing back-end capacity to date.
Mainland China, dubbed as the world’s factory, currently makes up for 30% of the global ATP capacity and is expected to increase its share to 32% by 2032. This is followed by Taiwan whose share of the market is estimated to dip from 27% currently to 23% in the next 10 years.
Korea’s existing share of 9% in the ATP market is also seen dipping to 5% during the forecast period.
“Whether new markets will realize their full potential (in ATP) to attract investment will depend on numerous factors, such as access to a skilled, cost-competitive workforce; availability of reliable power and water utilities; an enabling regulatory environment with limited market barriers; security and rule of law; and competitive incentives schemes,” SIA and BCG stated in the report.
