Semiconductor Spotlight: Market Dynamics and Leadership Imperatives in Southeast Asia 

Southeast Asia is steadily becoming a strategic hub for the global semiconductor industry rather than serving as a manufacturing extension of it.  

According to UNCTAD, FDI inflows to ASEAN reached a record USD 225 billion in 2025 even as global FDI fell 11%. The region has also overtaken China as the preferred destination for manufacturing investment from OECD countries. At the same time, a worldwide shortage of experienced semiconductor talent is changing how companies think about hiring and leadership, with access to experienced leaders and scarce technical expertise becoming what distinguishes market leaders from the rest. 

Semiconductor Investment Trends Across ASEAN

The region’s strategic location linking major producers, suppliers, and end markets is drawing serious capital commitments, with labor costs remaining competitive compared with mature semiconductor hubs, particularly for assembly, testing, and packaging. 

Germany’s Infineon committed USD 5.87 billion to expand its Kulim, Malaysia facility into one of the world’s largest silicon carbide production sites, Intel is investing USD 7 billion in Malaysia for assembly and testing capabilities, GlobalFoundries invested USD 4 billion in Singapore and started production in 2023, and Micron has invested USD 7 billion in Singapore to build an advanced packaging plant for high bandwidth memory scheduled to begin operations in 2026. Hana Micron is also increasing its investment to USD 1 billion in Vietnam by 2025. 

National Semiconductor Strategies Taking Shape

Active government involvement in talent development across Malaysia, Singapore, Vietnam, and Thailand is becoming a defining feature of the region’s approach. 

Malaysia’s National Semiconductor Strategy aims to attract approximately USD 107 billion in investment with plans to build high value firms and expand local talent pools, targeting 60,000 new skilled workers by 2030. As of November 2025, Malaysia has already trained 13,679 engineers while holding a 13% share of global back end manufacturing. ARM’s agreement to collaborate on chip design with Malaysian partners reflects the ambition to move beyond fabrication into intellectual property creation. 

Vietnam’s national semiconductor strategy commits to training 50,000 semiconductor engineers by 2030 with a USD 1.08 billion investment including a minimum of 5,000 engineers with expertise in AI, though the country currently has only 15,000 semiconductor specialists and meets just 20% of its workforce needs. Ho Chi Minh City and Da Nang are positioning themselves as hubs for chip design, with Da Nang offering super deductions of up to 150% for R&D costs.  

Singapore contributes more than 10% of global semiconductor output and around 20% of global semiconductor equipment production, with the industry accounting for 7% of GDP. 

Thailand also targets 80,000 semiconductor workers over the next five years. 

Semiconductor Talent Shortage: The Constraint That Will Determine Outcomes

Rapid expansion, however, has exposed a severe constraint that capital alone cannot solve. According to a 2025 hiring trends report, 77% of all employers in Asia Pacific report difficulty filling roles, driving salary inflation as employers compete for limited skilled talent. This has been a longstanding problem, including in the semiconductor industry. In 2017, a Deloitte SEMI survey found 82% of executives cite a shortage of qualified candidates and 73% cite a lack of diverse skills and talent. Graduate output also remains well below projected demand: for example, Malaysia needs 50,000 skilled engineers but produces only about 5,000 engineering graduates annually. 

The shortage becomes more pronounced at mid and senior leadership levels, where experience in scaling operations, leading innovation, and managing cross border teams remains limited. Many master engineers and senior fab leaders are approaching retirement across the industry, and when a veteran process engineer leaves, decades of institutional wisdom leave with them, creating bottlenecks in decision making, innovation leadership, and cross border project execution.  

Unfortunately, brain drain compounds the problem, too: Malaysia’s Deputy Minister acknowledged that out of every 10 graduates trained, only three remain in Malaysia after a few years, with salary differentials elsewhere being the primary driver. According to the Fulcrum, severe talent shortages in R&D and design skills can arrest ASEAN’s aspiration to move into higher value creating supply chains, with Singapore listing semiconductor engineer, instrumentation engineer, and process engineer on its Shortage Occupation List. 

Competition for Semiconductor Executives Across Asia Pacific

Competition for semiconductor leaders has become aggressive. According to a December 2025 Southeast Asia job market review, the skills gap widened sharply in technology, semiconductors, and digital manufacturing, with many roles staying open for months. Employers responded by raising salaries, with 2025 increases averaging 6.7% in Vietnam, 6.3% in Indonesia, 5.8% in the Philippines, and 5% in Malaysia. Yet turnover remained high at around 17% in Singapore, 19% in the Philippines, and 20% in Indonesia. For companies looking to attract and retain talent, this means differentiating through credible career paths, exposure to advanced technologies, and real leadership responsibility rather than compensation alone. 

Leadership mobility has also become more fluid, with established firms deploying experienced managers into Southeast Asia to stabilize operations while Southeast Asian executives seek assignments abroad to accelerate learning and build credibility. Vietnam and Singapore have launched the Innovation Talent Exchange programme, allowing professionals to undertake two-year placements in priority sectors including semiconductors, beginning with 300 professionals from each country and aiming to scale to 1,000 annually. This circulation builds regional capability, but any country’s talent advantage remains temporary, with the question being which organizations create environments where leaders want to stay and develop. 

Building the Leadership Pipeline

Addressing the talent gap requires action on multiple fronts: closer alignment between universities and industry, structured rotation programs, tapping into diaspora networks, and expanding public private partnerships for scholarships, apprenticeships, and executive education. 

Some examples are already emerging. Malaysia’s collaboration with Taiwan’s National Cheng Kung University offers internships and employment opportunities to cultivate international talent, while VNU Hanoi launched a semiconductor alliance connecting nearly 30 universities and businesses. Companies across Malaysia are also exploring industry co-funded training, with 32% expecting training to be co-funded across the industry, twice the global level, while 35% plan to diversify skill assessments by looking at short courses and online certifications rather than degrees alone. 

What Could Change This Trajectory

Several forces will shape what happens next. Demand for AI chips, electric vehicle components, and data center infrastructure continues to expand, pulling investment toward whoever can deliver. Southeast Asia is expected to capture 25% of global ATP capacity by 2032 as international players relocate production from older hubs. 

Regional coordination is also advancing. ASEAN’s Framework for Integrated Semiconductor Supply Chain, launched during Malaysia’s 2025 ASEAN Chairmanship, aims to have each member state play a complementary role, though implementation of this non-binding framework will depend on political alignment. Malaysia has positioned itself as a neutral location for semiconductor production, allowing companies to serve the US, China, and elsewhere from Malaysian facilities. 

But risks remain. Global geopolitical tensions, particularly US-China decoupling, could reshape supply chains unpredictably. Competition from established hubs will continue pulling skilled talent and capital unless incentives and career prospects stay competitive. And the structural scarcity of senior talent may limit how fast the region can scale if companies and governments do not invest in building long term leadership pipelines. 

Leadership as the Decisive Factor

Southeast Asia’s rise in the semiconductor industry is real and accelerating, with investment, policy support, and global supply chain reconfiguration all working in its favor. Yet leadership remains the differentiator. Organizations that invest early in attracting, developing, and retaining capable leaders will be best positioned to compete and sustain growth over the long term. 

Building effective leadership teams in this environment requires understanding cross border compensation dynamics, identifying which executives can deliver in unfamiliar operating environments, and structuring succession plans that account for the demographic pressures facing senior technical roles. Get this right, and Southeast Asia can move beyond being a complementary manufacturing base to become a genuine co-creator of the next chapter of global semiconductor innovation. 

Stanton Chase maintains offices across Southeast Asia working with semiconductor clients on executive search, leadership assessment and development, succession planning, and board composition. For organizations facing these challenges, reaching out to one of our regional offices may be a useful starting point. 

About the Authors

Ingo Schmittmann is Managing Director at Stanton Chase Kuala Lumpur and Global Subsector Leader for Aviation and Railways. He brings more than 25 years of experience in aviation, railway, infrastructure, and engineering industries, having held CFO and General Manager positions across sales, manufacturing, and HR. He holds an MBA from Strathclyde University and has worked extensively across Asia and North Africa. 

Tony Kang is Managing Director at Stanton Chase Korea with over 23 years of experience in pharmaceutical, medical device, and optical companies, including senior roles at Eli Lilly and Allergan. For the past 12 years, he has led Stanton Chase Korea, specializing in executive search and leadership advisory across Industrial, Consumer Products, and Healthcare sectors. He holds an MBA from the Helsinki School of Economics and Business. 

Frank Koh is a Partner at Stanton Chase Singapore and Regional Sector Leader for Industrial across Asia Pacific. With over 20 years of experience in executive search and coaching, Frank serves clients in high-tech manufacturing, IT, chemical, and life science industries. He holds an MBA from Preston University and certifications in Advanced Manufacturing 4.0 and Supply Chain Innovation. 

Jan-Bart Smits is Managing Partner at Stanton Chase Amsterdam and Global Subsector Leader for Semiconductors. With over 30 years in executive search, including 12 years at Korn/Ferry International across Amsterdam and Dubai, Jan-Bart specializes in the semiconductor industry, technology, and professional services. He has held various global leadership roles at Stanton Chase, including Global Practice Leader for Technology and Professional Services, and Global Chair. He holds an MSc in Astrophysics from Leiden University.