Multinational tech companies are investing more in the region, offering more job opportunities.
MANILA (ANN) – More and more multinational tech companies are setting up shop in Southeast Asia, with several tech giants expressing their intentions to strengthen their foothold in the region.
With geopolitical factors at play, the move is seen by some observers as an effort to decrease dependence on China. Still, these recent developments are being welcomed in anticipation that these will also offer economic opportunities for hundreds of thousands of locals.
Here are the latest movements in the tech landscape of some of the region’s biggest economies.
Singapore
Singapore has upped its game in the competition for the title of Asia’s premier business destination, according to a report published by Bloomberg Intelligence. More multinational companies are choosing Singapore over Hong Kong to set up their headquarters, the Bloomberg report found.
The report said the Garden City hosted regional headquarters for 4,200 multinational firms in 2023, leading Hong Kong by a huge margin which only has 1,336.
Just recently, Google has increased its investment in infrastructure in Singapore to USD5 billion (USD6.7 billion) with the completion of its fourth data centre, The Straits Times reported. Currently, more than 500 people work in Google data centres in the country, the tech giant said, adding that these hubs power its popular digital services such as its search engine and Google Maps.
Other companies that already have their headquarters in Singapore include Microsoft, FedEx, Rolls-Royce, and Mead Johnson. There’s also online fashion giant Shein and social media firm TikTok who have set up hubs in the city-state.
The Bloomberg report said that many “Chinese companies looking to hedge geopolitical risks and broaden their reach” opt for Singapore, mainly because of its Western ties and talent pool, as well as its political stability and freedom despite geopolitical risks in the region. Moreover, it has “targeted incentives” for foreign companies looking to set up regional hubs.
Aside from companies that have already established their headquarters in Singapore, several others are looking to expand their operations in the tiny Southeast Asian nation, as per an article on Channel News Asia. This includes tech companies Alibaba and Huawei Technologies, as well as electric vehicle maker Nio.
Thailand
In late April, Microsoft made some huge announcements in terms of investments in several Southeast Asian nations. Reuters reported the company will open its first regional data centre in Thailand as it aims to boost the availability of cloud services. The data centre will also help “enterprise-grade reliability, performance, and compliance with data residency and privacy standards,” Microsoft added in a statement.
Amazon Web Services or AWS has also pledged to unlock more of the kingdom’s potential in keeping up with global digital economy trends, with a focus on equipping essential skill sets in the current Thai workforce.
Moreover, the move is seen as part of AWS’s strategy to keep Thailand as a key market in Southeast Asia, The Nation reported. To reaffirm its commitment, AWS reiterated its plan to invest more than USD5 billion (roughly THB190 billion) in Thailand by 2037.
Thailand is the fourth ASEAN country, after Singapore, Indonesia, and Malaysia, where AWS has established its region. The new infrastructure enables the country to securely store data on its own territory, help customers achieve even lower latency, and meet demand for cloud services throughout Southeast Asia.
Aside from US companies, China-based tech biggie Huawei also pledged to help boost Thai ICT talent. The Nation reported that the company aims to train 10,000 information and communication technologies (ICT) professionals, 5,000 Cloud AI developers, and 2,000 green engineers by 2025.
Malaysia
Earlier this year, Microsoft announced that it will be investing USD2.2 billion in cloud and AI services in Malaysia, according to a report on The Jakarta Post. This is the largest investment in Microsoft’s 32-year history in Malaysia that will create AI-skilling opportunities for 200,000 people and support the country’s developers, the company said.
Google will also be investing USD2 billion in Malaysia to house the firm’s first data centre in the country, as per a report on The Jakarta Post. The government said this would support 26,500 jobs across various sectors in Malaysia, including healthcare, education, and finance, and comes days after Prime Minister Anwar Ibrahim targeted at least USD107 billion in investments for the semiconductor industry.
Adding to the two tech giants is FedEx, which also plans to expand business in Malaysia, The Star reported. The multinational express transportation company intends to broaden its business in the country, specifically by using the existing facilities at several airports, the Prime Minister said.
Indonesia
In next-door Indonesia, Microsoft will also invest USD1.7 billion over the next four years in new cloud and AI infrastructure, as well as AI-skilling opportunities for about 840,000 people, and “support for the nation’s growing developer community,” the company announced in a press release, as quoted in a separate article on The Jakarta Post.
Microsoft has pledged to train a total of 2.5 million people in Southeast Asia in the use of artificial intelligence by 2025.
Vietnam
Vietnam continues its ascent as a manufacturing powerhouse in Asia. In April, Apple CEO Tim Cook announced plans to boost spending in Vietnam, as reported on Al Jazeera. Cook even went on a two-day visit to the Southeast Asian country where he met with programmers, students, content creators, and users of Apple products.
Vietnam has evolved to become the California-based tech giant’s most important manufacturing hub outside of China in recent years, as per the article, with suppliers such as Luxshare, Foxconn, Compal, and GoerTek operating factories that employ more than 150,000 Vietnamese.
The report added that Cook’s trip comes as President Joe Biden’s administration seeks to lessen US dependence on China.
South Korea’s Samsung Electronics also vowed to expand annual spending in Vietnam to USD1 billion, “as the Southeast Asian country emerges as a strategic base for manufacturing in the region,” according to a report on The Korea Herald.
Samsung Electronics chief financial officer Park Hark-kyu met with Vietnamese Prime Minister Pham Minh Chinh in Hanoi on May 9 to discuss business partnerships. During the meeting, the Samsung CFO noted how the company has invested USD22.4 billion in Vietnam so far and shared plans to expand the investment to about USD1 billion annually.
Park praised the investment and business climate of Vietnam and said Samsung will continue to “stand side by side with the country on its development path.”
Philippines
Meanwhile, the US has pledged to boost investment links in the Philippines, its oldest ally in Asia.
During a visit last March, US Commerce Secretary Gina Raimondo announced plans to invest more than USD1 billion in the Philippines’ tech sector and help double the number of semiconductor factories in the country, according to a report by the London-based Financial Times.
Experts said this highlights the archipelago’s “growing importance to Washington and will also help reduce the Philippine economy’s reliance on China,” as stated in the same article. American business executives from 22 businesses, including Alphabet’s Google, Visa, and Microsoft, joined Raimondo on the trip.
The pledge comes as welcome news to the Philippines which saw inbound foreign investment dropping 6.6 percent to USD8.8 billion in 2023, according to the country’s central bank, the second straight annual decline.
Compared with the record USD224 billion in foreign direct investments that Asean countries attracted in 2022, “the figures highlight how the country is missing out on a manufacturing investment boom spurred by global companies’ efforts to ‘de-risk’ and diversify supply chains away from China,” the Financial Times added.
