Southeast Asia needs to expand semiconductor production, global trade group SEMI says

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KUALA LUMPUR, May 5 (Reuters) – Southeast Asian countries should aim to build more semiconductor fabrication plants in the coming decade to help the sector diversify and reduce supply risks, the head of global chip industry group SEMI said on Tuesday. 

SEMI chief executive Ajit Manocha said there were 64 new fabs expected to become operational in Asia by 2029, but just six of them were in the continent’s southeast, with the rest concentrated mostly in China and Taiwan. 

The lack of geographical diversity poses challenges to the industry given geopolitical issues and other vulnerabilities, Manocha told an industry forum in Kuala Lumpur, without going into specifics. 

“We want to see more hubs to come in the like-minded countries, more hubs to come in place, so that we de-risk the vulnerabilities,” he said, adding that it was “really important that Southeast Asia steps up”.  

SEMI represents around 3,000 member companies worldwide, including major design firms and manufacturers such as Intel and AMD. 

Recent disruptions to the global semiconductor supply chain, including the COVID-19 pandemic as well as export restrictions arising from U.S.-China trade tensions, have raised concerns about the risks of concentrating advanced chip manufacturing in a few Asian regions. 

(Reporting by Danial Azhar; Writing by Rozanna Latiff; Editing by David Stanway)