{"id":121351,"date":"2023-12-22T06:03:56","date_gmt":"2023-12-22T06:03:56","guid":{"rendered":"https:\/\/www.controleng.com\/articles\/southeast-asia-becoming-major-global-manufacturing-hub\/"},"modified":"2025-04-23T19:02:09","modified_gmt":"2025-04-24T00:02:09","slug":"southeast-asia-becoming-major-global-manufacturing-hub","status":"publish","type":"post","link":"https:\/\/www.controleng.com\/southeast-asia-becoming-major-global-manufacturing-hub\/","title":{"rendered":"Southeast Asia becoming major global manufacturing hub"},"content":{"rendered":"<h2><strong>Global manufacturing insights<\/strong><\/h2>\n<ul>\n<li>Southeast Asia&#8217;s rise as manufacturing hubs (Malaysia for semiconductors, Vietnam for electronics, Thailand for automotive) continues, attracting global investment despite reshoring trends elsewhere.<\/li>\n<li>Chinese firms expand into Southeast Asia, leveraging these hubs for manufacturing, diversifying their supply chains away from China for electronics and automotive sectors.<\/li>\n<\/ul>\n<hr \/>\n<p>As manufacturing becomes increasingly globalized, a number of countries in Southeast Asia are becoming hubs for certain products and components. These include Malaysia \u2013 semiconductors; Vietnam \u2013 electronics; and Thailand \u2013 automotive.<\/p>\n<p>The latest work by analysts at Interact Analysis shows the trend for international companies establishing facilities in the region is showing little sign of stopping, despite predictions of a growing trend for reshoring and nearshoring in many western markets and legislation such as the Inflation Reduction Act (IRA) in the United States encouraging domestic production of technology such as lithium-ion batteries. Malaysia, Vietnam and Thailand all offer relatively cheap destinations for the manufacture of parts for export to other markets.<\/p>\n<p>In addition to global corporations choosing to base manufacturing operations in south-east Asia, some Chinese manufacturers are also expanding operations to other countries in the region. Creating manufacturing hubs, such as those in Malaysia, Vietnam and Thailand, can help eliminate inefficiencies, provide proximity to expertise, remove time zone problems, and provide greater control over production costs.<\/p>\n<p>However, as the Interact Analysis Manufacturing Industry Output (MIO) Tracker demonstrates, these hubs in south-east Asia are unlikely to cause huge concern to China in terms of capacity and competition because of the sheer size of its manufacturing economy. For example, China\u2019s automotive sector alone was worth an estimated $1.704tn in 2023, compared with just $46bn for Thailand\u2019s this year. The APAC region\u2019s other manufacturing powerhouse, India, will similarly be affected very little by the creation of the hubs in Malaysia, Thailand and Vietnam, largely because these are not mainstays of its manufacturing economy, which continues to be dominated by food &amp; beverage and metals (although automotive has a growing market share), and because of the sheer size of its manufacturing sector.<\/p>\n<p>Malaysia, Thailand and Vietnam are all relatively small areas, where the creation of manufacturing hubs and high turnover by a small number of companies can have a significant impact on their economies in a relatively short space of time.<\/p>\n<h2>Malaysia is becoming a global semiconductor hub<\/h2>\n<p>Malaysia has seen a series of key announcements relating to its semiconductor manufacturing industry in recent years, including leading international names. The country\u2019s semiconductor manufacturing industry now comprises 20.5% of its total manufacturing industry output.<\/p>\n<ul>\n<li>\n<h3>Intel \u2013 announced plans in 2021 to\u00a0<a href=\"https:\/\/www.cnbc.com\/2021\/12\/16\/intel-to-invest-7-billion-in-new-malaysia-plant-creating-9000-jobs.html\">invest more than $7bn<\/a>\u00a0in a new chip packaging and testing facility in Malaysia, due to come online in 2024<\/h3>\n<\/li>\n<li>\n<h3>ASE \u2013 a leading Taiwanese semiconductor packaging and testing manufacture\u00a0<a href=\"https:\/\/www.aseglobal.com\/press-room\/asem-groundbreaking\/\">broke ground on a new facility<\/a>\u00a0in Malaysia in 2022<\/h3>\n<\/li>\n<li>\n<h3>Texas Instruments \u2013 announced plans this year to expand its existing footprint in the territory with two new assembly and test\u00a0<a href=\"https:\/\/news.ti.com\/texas-instruments-to-expand-manufacturing-operations-in-malaysia\">factories in Kuala Lumpur and Melaka<\/a>, part of efforts to better control its supply chain by bringing 90% of assembly and test operations in-house by 2030<\/h3>\n<\/li>\n<li>\n<h3>Infineon \u2013 also unveiled plans in 2023 to invest more than 5bn euros over the next five years to build the world\u2019s largest 200mm silicon carbide (SiC)\u00a0<a href=\"https:\/\/www.infineon.com\/cms\/en\/about-infineon\/press\/press-releases\/2023\/INFXX202308-140.html\">power fabrication plant in Malaysia<\/a>.<\/h3>\n<\/li>\n<\/ul>\n<figure id=\"attachment_538540\" aria-describedby=\"caption-attachment-538540\" style=\"width: 1024px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-538540\" src=\"https:\/\/www.controleng.com\/wp-content\/uploads\/2024\/11\/CTL2312_WEB_IMG_InteractAnalysis_Malaysia_MIOValue.jpeg\" alt=\"Semiconductor &amp; components comprises 21.6% of Malaysia\u2019s total manufacturing industry output. \" width=\"1024\" height=\"793\" \/><figcaption id=\"caption-attachment-538540\" class=\"wp-caption-text\">Semiconductor &amp; components comprises 21.6% of Malaysia\u2019s total manufacturing industry output. Courtesy: Interact Analysis<\/figcaption><\/figure>\n<h2>Electronics manufacturers\/assemblers flock to Vietnam<\/h2>\n<p>Vietnam is now one of the key destinations for electronics manufacturers \/ assemblers, with a number of recent announcements indicating this trend is accelerating. For example,\u00a0<a href=\"https:\/\/www.reuters.com\/technology\/foxconn-invest-246-mln-2-projects-northern-vietnam-2023-06-30\/\">Foxconn announced<\/a>\u00a0in June 2023 its plans to invest $250 million in Vietnam to manufacture electric vehicle and telecoms parts. This follows comments made early in 2023 by\u00a0<a href=\"https:\/\/www.reuters.com\/technology\/apple-supplier-foxconns-q4-profit-falls-10-yy-line-with-forecasts-2023-03-15\/\">Foxconn Chairman Liu Young-way<\/a>, in which he stated about 70% of the company\u2019s revenue is derived from products made in China, but \u201cgoing forward the proportion of overseas region will continue to increase\u201d.<\/p>\n<p>In addition to Foxconn\u2019s announcements, GoerTek (a major Chinese assembler of AirPods)\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-02-28\/apple-suppliers-are-racing-to-exit-china-airpods-maker-says\">will invest $280 million<\/a>\u00a0in a new plant in Vietnam, continuing to diversify its supply chain away from China and maintain its position in the Apple supply chain. Furthermore, China\u2019s Sunny Optical Technology plans\u00a0<a href=\"https:\/\/www.reuters.com\/article\/vietnam-economy-idUKL1N35G1FG\">$2.5 billion investment in Vietnam<\/a>\u00a0(March 2023), and Sunny Group will\u00a0<a href=\"https:\/\/investvietnam.vn\/sunny-group-to-build-036-150-million-factory-in-nghe-an-n2559.html\">build a $150 million factory in Vietnam<\/a>\u00a0to manufacture camera modules, mobile phone cameras, and vehicle cameras (September 2023), with the latter\u2019s plant expected to be put into production in 2025.<\/p>\n<h2>Chinese automotive manufacturers invest in Thailand<\/h2>\n<p>Recent years have also seen a slew of investments in Thailand by Chinese automotive manufacturers, including:<\/p>\n<ul>\n<li>\n<h3>In 2020, China\u2019s automotive manufacturer\u00a0<a href=\"https:\/\/asia.nikkei.com\/Business\/Automobiles\/China-s-Great-Wall-Motor-to-double-Thai-EV-investment\">Great Wall Motors invested in Thailand<\/a>\u00a0by acquiring General Motor\u2019s factory and announced in 2022 to expand investments in the factory to produce EV cars.<\/h3>\n<\/li>\n<li>\n<h3>In 2022, China\u2019s EV giant BYD announced it would set up a facility in Thailand to\u00a0<a href=\"https:\/\/www.nationthailand.com\/business\/automobile\/40030246\">start producing 150,000 passenger cars per year from 2024<\/a>, some of which will be exported to Southeast Asia and Europe.<\/h3>\n<\/li>\n<li>\n<h3>In 2023, Chinese EV manufacturer\u00a0<a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/chinas-hozon-produce-evs-thailand-southeast-asian-market-2023-05-06\/\">Hozon announced to invest in its first overseas factory in Thailand<\/a>\u00a0to produce for SE Asian market.<\/h3>\n<\/li>\n<li>\n<h3>In 2023, Chinese EV manufacturer\u00a0<a href=\"https:\/\/www.nationthailand.com\/business\/automobile\/40030246\">Changan Automobile has set a target of manufacturing 100,000 EVs in Thailand per year<\/a>, both for the domestic market and export to countries with right hand drive such as Australia, New Zealand, the UK, and South Africa.<\/h3>\n<\/li>\n<\/ul>\n<figure id=\"attachment_538541\" aria-describedby=\"caption-attachment-538541\" style=\"width: 1024px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-538541\" src=\"https:\/\/www.controleng.com\/wp-content\/uploads\/2024\/11\/CTL2312_WEB_IMG_InteractAnalysis_Thailand_MIOValue.jpeg\" alt=\"The automotive industry comprises 14.7% of Thailand\u2019s manufacturing industry output. \" width=\"1024\" height=\"793\" \/><figcaption id=\"caption-attachment-538541\" class=\"wp-caption-text\">The automotive industry comprises 14.7% of Thailand\u2019s manufacturing industry output. Courtesy: Interact Analysis<\/figcaption><\/figure>\n<p>In conclusion, we are likely to see greater concentration of these industries in Malaysia, Vietnam and Thailand as each country appears to be specializing in production of parts. However, this is unlikely to have a significant impact on the vast manufacturing economies of China and India in the short term, and may well feed components and parts into their domestic manufacturing industries. We are also likely to see exports from the trio of south-east Asian territories to other regions, such as the expanding electric vehicle and batteries markets in the Americas and Europe.<\/p>\n<p>Interact Analysis\u2019 Manufacturing Industry Output (MIO) Tracker provides unparalleled analysis of the global machinery and manufacturing industry, produced by analysts around the world. It covers 45 countries, with more added each year, 30 machinery sectors and two points in the supply chain (machinery and manufacturing end users). This article is drawn together from the accumulated knowledge of expert analysts who compare, monitor and deliver insights into key market trends.<\/p>\n<p>&#8211; <a href=\"https:\/\/interactanalysis.com\/\">Interact Analysis<\/a> is a CFE Media and Technology content partner.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A series of global manufacturing hubs are being established in Southeast Asia, especially in Malaysia, Vietnam and Thailand.<\/p>\n","protected":false},"author":1441,"featured_media":121354,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"pgc_sgb_lightbox_settings":"","footnotes":""},"categories":[104116],"tags":[],"tracking-metrics":[],"display-location":[],"class_list":{"2":"type-post"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Southeast Asia becoming major global manufacturing hub - 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