ANN/THE NATION – United States (US) President Donald Trump’s proposed 25 per cent tariffs on semiconductors could prompt chipmakers to set up US-based facilities to avoid levies, potentially diminishing Southeast Asia’s role in the supply chain.
However, experts believe this won’t stop the industry’s global growth.
The region’s lower costs and strong ties with the electronics sector will continue to attract investment, despite new challenges.
Senior researcher at the Kasikorn Research Centre in Bangkok Rujipun Assarut noted that the US will struggle to achieve dominant competitiveness in semiconductor production due to higher costs.
“ASEAN countries still hold advantages, especially in assembly and testing,” he said. As Southeast Asia’s major production base for home appliances and electric vehicles (EV) and given its strengths as a regional logistics center, Thailand has great advantages for the development of the semiconductor industry and attracting foreign investment, Rujipun said.
Thailand is a hub for EV production, hosting partnerships with Chinese automakers.
Apart from this, the kingdom’s new digital development plan and promotion of artificial intelligence technology mean “great market potential” for the local chip industry, according to Rujipun. The analyst noted that the global semiconductor supply chain is remarkably complex, segmented and international.
Hyping the notion of “supply chain security” and positioning chips as strategic assets, the Trump administration is ramping up protectionist measures with new import tariffs and encouraging more production within the US.
“The US strategy aims to boost (the nation’s chip) self-reliance and market segregation, pushing those companies with overseas investment back to the US. Such policy has altered the course of globalisation,” said Director of the Science Technology and Innovation Policy Institute at the King Mongkut’s University of Technology Thonburi Bank Ngamarunchot.
The global semiconductor industry has been roiled in recent years. Some supply chains have shifted to Southeast Asia. Thailand saw a 35-per-cent surge in foreign investment applications last year, according to the Thailand Board of Investment.
