Back
About RSIS
Introduction
Building the Foundations
Welcome Message
Board of Governors
Staff Profiles
Executive Deputy Chairman’s Office
Dean’s Office
Management
Distinguished Fellows
Faculty and Research
Associate Research Fellows, Senior Analysts and Research Analysts
Visiting Fellows
Adjunct Fellows
Administrative Staff
Honours and Awards for RSIS Staff and Students
RSIS Endowment Fund
Endowed Professorships
Career Opportunities
Getting to RSIS
Research
Research Centres
Centre for Multilateralism Studies (CMS)
Centre for Non-Traditional Security Studies (NTS Centre)
Centre of Excellence for National Security
Institute of Defence and Strategic Studies (IDSS)
International Centre for Political Violence and Terrorism Research (ICPVTR)
Research Programmes
National Security Studies Programme (NSSP)
Social Cohesion Research Programme (SCRP)
Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
Other Research
Future Issues and Technology Cluster
Research@RSIS
Science and Technology Studies Programme (STSP) (2017-2020)
Graduate Education
Graduate Programmes Office
Exchange Partners and Programmes
How to Apply
Financial Assistance
Meet the Admissions Team: Information Sessions and other events
RSIS Alumni
Outreach
Global Networks
About Global Networks
RSIS Alumni
Executive Education
About Executive Education
SRP Executive Programme
Terrorism Analyst Training Course (TATC)
International Programmes
About International Programmes
Asia-Pacific Programme for Senior Military Officers (APPSMO)
Asia-Pacific Programme for Senior National Security Officers (APPSNO)
International Conference on Cohesive Societies (ICCS)
International Strategy Forum-Asia (ISF-Asia)
Publications
RSIS Publications
Annual Reviews
Books
Bulletins and Newsletters
RSIS Commentary Series
Counter Terrorist Trends and Analyses
Commemorative / Event Reports
Future Issues
IDSS Papers
Interreligious Relations
Monographs
NTS Insight
Policy Reports
Working Papers
External Publications
Authored Books
Journal Articles
Edited Books
Chapters in Edited Books
Policy Reports
Working Papers
Op-Eds
Glossary of Abbreviations
Policy-relevant Articles Given RSIS Award
RSIS Publications for the Year
External Publications for the Year
Media
Cohesive Societies
Sustainable Security
Other Resource Pages
News Releases
Speeches
Video/Audio Channel
External Podcasts
Events
Contact Us
S. Rajaratnam School of International Studies Think Tank and Graduate School Ponder The Improbable Since 1966
Nanyang Technological University Nanyang Technological University
  • About RSIS
      IntroductionBuilding the FoundationsWelcome MessageBoard of GovernorsHonours and Awards for RSIS Staff and StudentsRSIS Endowment FundEndowed ProfessorshipsCareer OpportunitiesGetting to RSIS
      Staff ProfilesExecutive Deputy Chairman’s OfficeDean’s OfficeManagementDistinguished FellowsFaculty and ResearchAssociate Research Fellows, Senior Analysts and Research AnalystsVisiting FellowsAdjunct FellowsAdministrative Staff
  • Research
      Research CentresCentre for Multilateralism Studies (CMS)Centre for Non-Traditional Security Studies (NTS Centre)Centre of Excellence for National SecurityInstitute of Defence and Strategic Studies (IDSS)International Centre for Political Violence and Terrorism Research (ICPVTR)
      Research ProgrammesNational Security Studies Programme (NSSP)Social Cohesion Research Programme (SCRP)Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
      Other ResearchFuture Issues and Technology ClusterResearch@RSISScience and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
      Graduate Programmes OfficeExchange Partners and ProgrammesHow to ApplyFinancial AssistanceMeet the Admissions Team: Information Sessions and other eventsRSIS Alumni
  • Outreach
      Global NetworksAbout Global NetworksRSIS Alumni
      Executive EducationAbout Executive EducationSRP Executive ProgrammeTerrorism Analyst Training Course (TATC)
      International ProgrammesAbout International ProgrammesAsia-Pacific Programme for Senior Military Officers (APPSMO)Asia-Pacific Programme for Senior National Security Officers (APPSNO)International Conference on Cohesive Societies (ICCS)International Strategy Forum-Asia (ISF-Asia)
  • Publications
      RSIS PublicationsAnnual ReviewsBooksBulletins and NewslettersRSIS Commentary SeriesCounter Terrorist Trends and AnalysesCommemorative / Event ReportsFuture IssuesIDSS PapersInterreligious RelationsMonographsNTS InsightPolicy ReportsWorking Papers
      External PublicationsAuthored BooksJournal ArticlesEdited BooksChapters in Edited BooksPolicy ReportsWorking PapersOp-Eds
      Glossary of AbbreviationsPolicy-relevant Articles Given RSIS AwardRSIS Publications for the YearExternal Publications for the Year
  • Media
      Cohesive SocietiesSustainable SecurityOther Resource PagesNews ReleasesSpeechesVideo/Audio ChannelExternal Podcasts
  • Events
  • Contact Us
    • Connect with Us

      rsis.ntu
      rsis_ntu
      rsisntu
      rsisvideocast
      school/rsis-ntu
      rsis.sg
      rsissg
      RSIS
      RSS
      Subscribe to RSIS Publications
      Subscribe to RSIS Events

      Getting to RSIS

      Nanyang Technological University
      Block S4, Level B3,
      50 Nanyang Avenue,
      Singapore 639798

      Click here for direction to RSIS

      Get in Touch

    Connect
    Search
    • RSIS
    • Publication
    • RSIS Publications
    • CO18003 | ASEAN’s Electronics Sector: Facing the Disruptive Trends
    • Annual Reviews
    • Books
    • Bulletins and Newsletters
    • RSIS Commentary Series
    • Counter Terrorist Trends and Analyses
    • Commemorative / Event Reports
    • Future Issues
    • IDSS Papers
    • Interreligious Relations
    • Monographs
    • NTS Insight
    • Policy Reports
    • Working Papers

    CO18003 | ASEAN’s Electronics Sector: Facing the Disruptive Trends
    Phidel Marion G. Vineles

    08 January 2018

    download pdf

    Synopsis

    ASEAN should have a stronger electronics sector to remain a competitive and dynamic region. The greatest challenge facing ASEAN is the impact of disruptive technologies. Can the region adapt?

    Commentary

    ELECTRONICS IS the largest export sector in ASEAN, equivalent to 25 percent of the region’s total exports in goods. According to the ASEAN Secretariat, the bulk of the world’s consumer electronics comes from the ASEAN region. Moreover, over 80 percent of the world’s hard drives are produced in ASEAN countries.

    As such, ASEAN should be responsive to the latest trends and developments in the global economy so as to remain competitive. For instance, the rising labour cost in China could stimulate the growth of the ASEAN electronics sector. Low labour cost in ASEAN will attract more foreign direct investments (FDIs) from multinational companies (MNCs). However, the emergence of disruptive technologies such as automation and robotics could also threaten the manufacturing opportunity in the sector.

    Electronics Industry: Engine of Growth

    How important is the electronics industry in ASEAN? Electrical and electronics (E&E) is one of the region’s most important sectors, directly employing more than 2.5 million workers in ASEAN, according to the International Labour Office (ILO). It is also described as a mainstay of the region’s economic growth.

    In Singapore, for example, Minister for Trade and Industry S. Iswaran said that the country’s electronics manufacturing sector is expected to create a total of 2,100 new jobs for professionals, managers, executives and technicians (PMETs) by 2020. Moreover, the sector also accounted for 4.4 percent of Singapore’s GDP last year, generating a total of S$90 billion in manufacturing output.

    Other countries in the region also show great potential in the sector. According to the ASEAN Secretariat, Thailand’s electronic assembly bases consisted of over 2,300 companies and employed 400,000 workers. Thus, the country is recognised as a global leader in production of integrated circuits, semiconductors, and hard drives. Thailand is also the world’s fourth largest producer of refrigerators and second largest for air-conditioning units.

    The Philippines is also a top producer of hard drives and semiconductors. ASEAN Secretariat data shows that the country is presently supplying the world with 2.5 million hard drives per month and also represents 10 percent of the world’s semiconductor manufacturing services.

    Malaysia’s electronics and electrical sector has more than 1,695 companies with a total investment of US$35.5 billion, which could increase further through investment in research and development (R&D). Vietnam’s electronics industry is the third largest in ASEAN and the country is the 12th largest exporter in the world, according to advisory firm Dezan Shira & Associates.

    The largest ASEAN economy, Indonesia, is also an electronic manufacturing hub with more than 250 companies and has attracted large corporates, according to its Investment Coordinating Board. Myanmar is also set to compete in labour-intensive industries, taking advantage of its low employee costs.

    Technology Trends

    Looking ahead, it is important for ASEAN member states to anchor their policies on technology trends that are likely to transform the E&E sector. ILO said that robotic automation, 3D printing and the Internet of Things (IoT) will have significant impacts on the electronics industry. Policymakers across the region should introduce policies that will help raise labour skills to ensure that the E&E sector will take advantage of its growth potentials.

    According to ILO, more than 60 percent of workers of the E&E sector in Indonesia, the Philippines, Thailand and Vietnam are at high risk of automation. Moreover, although it is said that people exceed the capabilities of robotic automation in overall assembly, robotic automation is continuously replacing lower-skilled tasks like packaging and assembling jobs.

    Hence, policymakers across the region should encourage youths to pursue their education in science, technology, engineering and mathematics (STEM). Doing this will allow ASEAN member states to possess higher skilled labour.

    Robotic automation’s impact on the E&E sector must be examined to determine what policies should be implemented in the region. The Boston Consulting Group (BCG) noted that there are four groups in the E&E sector that will account for 75 percent of robotic automation installations by 2025: electrical equipment, appliances and components; computers and electronic products; transport equipment; and machinery.

    Need to Study Trends

    This projection is worthy of study by ASEAN given that some of its member states have gained prominence in the said industry groups. For example, Thailand is the world’s second largest producer of air-conditioning units.

    The deployment of 3D printing throughout ASEAN’s E&E sector is another technology trend. 3D printing’s future adoption should not be a surprise because there are reports that 3D printed circuits will become commercially available next year, according to ILO. The challenge for ASEAN is to increase its human capital investment, considering that the application of this technology requires high labour skills.

    The rise of the Internet of Things (IoT) is opening up new opportunities for the region. ILO said that IoT is projected to provide significant opportunities for semiconductor companies because this technology will stimulate demand for connectivity, memory and sensors.

    IoT is also seen to ramp up the global annual revenue of the semiconductor industry, especially since this technology could help the E&E sector produce innovative products like IoT integrated consumer devices.

    Towards a Stronger Sector

    For a stronger E&E sector, ASEAN should include the emerging technology trends such as 3D printing and IoT as part of its key areas of cooperation. Such cooperation should be through investment and capacity building. Regional investment activities must be devoted to strengthening human capital to acquire high labour skills for high value-added activities.

    This will help facilitate the growth of the E&E sector through higher-value activities and technology upgrades. It is important to underscore that failure to invest in education and skills training might drive FDIs out to other countries.

    Capacity building must also be developed among member states to enhance their electronics skills base. It could be in the form of building ASEAN centres of excellence in the areas of innovation, product design, and research and development (R&D). Collaboration involving technical vocational education and training (TVET) institutions across the region is also important, apart from information sharing among member states.

    About the Author

    Phidel Vineles is a Senior Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

    Categories: RSIS Commentary Series / Country and Region Studies / International Political Economy / Regionalism and Multilateralism / Southeast Asia and ASEAN / Global
    comments powered by Disqus

    Synopsis

    ASEAN should have a stronger electronics sector to remain a competitive and dynamic region. The greatest challenge facing ASEAN is the impact of disruptive technologies. Can the region adapt?

    Commentary

    ELECTRONICS IS the largest export sector in ASEAN, equivalent to 25 percent of the region’s total exports in goods. According to the ASEAN Secretariat, the bulk of the world’s consumer electronics comes from the ASEAN region. Moreover, over 80 percent of the world’s hard drives are produced in ASEAN countries.

    As such, ASEAN should be responsive to the latest trends and developments in the global economy so as to remain competitive. For instance, the rising labour cost in China could stimulate the growth of the ASEAN electronics sector. Low labour cost in ASEAN will attract more foreign direct investments (FDIs) from multinational companies (MNCs). However, the emergence of disruptive technologies such as automation and robotics could also threaten the manufacturing opportunity in the sector.

    Electronics Industry: Engine of Growth

    How important is the electronics industry in ASEAN? Electrical and electronics (E&E) is one of the region’s most important sectors, directly employing more than 2.5 million workers in ASEAN, according to the International Labour Office (ILO). It is also described as a mainstay of the region’s economic growth.

    In Singapore, for example, Minister for Trade and Industry S. Iswaran said that the country’s electronics manufacturing sector is expected to create a total of 2,100 new jobs for professionals, managers, executives and technicians (PMETs) by 2020. Moreover, the sector also accounted for 4.4 percent of Singapore’s GDP last year, generating a total of S$90 billion in manufacturing output.

    Other countries in the region also show great potential in the sector. According to the ASEAN Secretariat, Thailand’s electronic assembly bases consisted of over 2,300 companies and employed 400,000 workers. Thus, the country is recognised as a global leader in production of integrated circuits, semiconductors, and hard drives. Thailand is also the world’s fourth largest producer of refrigerators and second largest for air-conditioning units.

    The Philippines is also a top producer of hard drives and semiconductors. ASEAN Secretariat data shows that the country is presently supplying the world with 2.5 million hard drives per month and also represents 10 percent of the world’s semiconductor manufacturing services.

    Malaysia’s electronics and electrical sector has more than 1,695 companies with a total investment of US$35.5 billion, which could increase further through investment in research and development (R&D). Vietnam’s electronics industry is the third largest in ASEAN and the country is the 12th largest exporter in the world, according to advisory firm Dezan Shira & Associates.

    The largest ASEAN economy, Indonesia, is also an electronic manufacturing hub with more than 250 companies and has attracted large corporates, according to its Investment Coordinating Board. Myanmar is also set to compete in labour-intensive industries, taking advantage of its low employee costs.

    Technology Trends

    Looking ahead, it is important for ASEAN member states to anchor their policies on technology trends that are likely to transform the E&E sector. ILO said that robotic automation, 3D printing and the Internet of Things (IoT) will have significant impacts on the electronics industry. Policymakers across the region should introduce policies that will help raise labour skills to ensure that the E&E sector will take advantage of its growth potentials.

    According to ILO, more than 60 percent of workers of the E&E sector in Indonesia, the Philippines, Thailand and Vietnam are at high risk of automation. Moreover, although it is said that people exceed the capabilities of robotic automation in overall assembly, robotic automation is continuously replacing lower-skilled tasks like packaging and assembling jobs.

    Hence, policymakers across the region should encourage youths to pursue their education in science, technology, engineering and mathematics (STEM). Doing this will allow ASEAN member states to possess higher skilled labour.

    Robotic automation’s impact on the E&E sector must be examined to determine what policies should be implemented in the region. The Boston Consulting Group (BCG) noted that there are four groups in the E&E sector that will account for 75 percent of robotic automation installations by 2025: electrical equipment, appliances and components; computers and electronic products; transport equipment; and machinery.

    Need to Study Trends

    This projection is worthy of study by ASEAN given that some of its member states have gained prominence in the said industry groups. For example, Thailand is the world’s second largest producer of air-conditioning units.

    The deployment of 3D printing throughout ASEAN’s E&E sector is another technology trend. 3D printing’s future adoption should not be a surprise because there are reports that 3D printed circuits will become commercially available next year, according to ILO. The challenge for ASEAN is to increase its human capital investment, considering that the application of this technology requires high labour skills.

    The rise of the Internet of Things (IoT) is opening up new opportunities for the region. ILO said that IoT is projected to provide significant opportunities for semiconductor companies because this technology will stimulate demand for connectivity, memory and sensors.

    IoT is also seen to ramp up the global annual revenue of the semiconductor industry, especially since this technology could help the E&E sector produce innovative products like IoT integrated consumer devices.

    Towards a Stronger Sector

    For a stronger E&E sector, ASEAN should include the emerging technology trends such as 3D printing and IoT as part of its key areas of cooperation. Such cooperation should be through investment and capacity building. Regional investment activities must be devoted to strengthening human capital to acquire high labour skills for high value-added activities.

    This will help facilitate the growth of the E&E sector through higher-value activities and technology upgrades. It is important to underscore that failure to invest in education and skills training might drive FDIs out to other countries.

    Capacity building must also be developed among member states to enhance their electronics skills base. It could be in the form of building ASEAN centres of excellence in the areas of innovation, product design, and research and development (R&D). Collaboration involving technical vocational education and training (TVET) institutions across the region is also important, apart from information sharing among member states.

    About the Author

    Phidel Vineles is a Senior Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

    Categories: RSIS Commentary Series / Country and Region Studies / International Political Economy / Regionalism and Multilateralism

    Popular Links

    About RSISResearch ProgrammesGraduate EducationPublicationsEventsAdmissionsCareersVideo/Audio ChannelRSIS Intranet

    Connect with Us

    rsis.ntu
    rsis_ntu
    rsisntu
    rsisvideocast
    school/rsis-ntu
    rsis.sg
    rsissg
    RSIS
    RSS
    Subscribe to RSIS Publications
    Subscribe to RSIS Events

    Getting to RSIS

    Nanyang Technological University
    Block S4, Level B3,
    50 Nanyang Avenue,
    Singapore 639798

    Click here for direction to RSIS

    Get in Touch

      Copyright © S. Rajaratnam School of International Studies. All rights reserved.
      Privacy Statement / Terms of Use
      Help us improve

        Rate your experience with this website
        123456
        Not satisfiedVery satisfied
        What did you like?
        0/255 characters
        What can be improved?
        0/255 characters
        Your email
        Please enter a valid email.
        Thank you for your feedback.
        This site uses cookies to offer you a better browsing experience. By continuing, you are agreeing to the use of cookies on your device as described in our privacy policy. Learn more
        OK
        Latest Book
        more info