SE Asia lags in AI boom despite manufacturing presence

Southeast Asia's struggle to capture value in the AI boom reflects a broader structural challenge: while the region has manufacturing capabilities in semiconductors, chip assembly, and server assembly, it lacks the integrated supply chain dominance and technological depth of North Asia. Taiwan, South Korea, and Japan have consolidated control over high-value segments—TSMC alone reported 707 billion New Taiwan dollars ($22 billion（約3.5兆円）) in quarterly profit in July, a 77% year-on-year jump—while Southeast Asia's contributions remain peripheral. Edward Lee's observation that the region "has not really moved up the value chain" despite decades of foreign direct investment highlights the risk of remaining locked in lower-margin assembly and testing roles.

The Philippines case illustrates how AI disruption compounds existing vulnerabilities. The business process outsourcing sector, which employs 1.89 million people and generated $40.3 billion（約6.4兆円） in revenue last year, faces direct automation risk. The official downgrade of 2028 forecasts—to $50.5 billion（約8.1兆円） revenue and 2.14 million jobs—is a public acknowledgment that AI is not simply a growth opportunity for the country but a competitive threat to its primary export sector. By contrast, countries with deeper manufacturing integration (Singapore, Malaysia, Vietnam) are expected to capture incremental gains in electronics demand, though these will likely remain incremental rather than transformative.

Lee's warning that "R&D is costly" and his refusal to offer a "silver bullet solution" suggests that catching up is not simply a matter of policy willingness. Building indigenous AI research capacity and semiconductor design expertise requires sustained investment, talent, and infrastructure that take years to mature. Geopolitical fragmentation of supply chains—a theme Standard Chartered emphasized in its July 15 briefing—may create some openings for Southeast Asian diversification, but only if the region invests now in capabilities that go beyond assembly.