Leading experts at the Invest ASEAN-Malaysia Conference 2025 have sounded the alarm on ASEAN’s lagging position in the global race for artificial intelligence (AI) and semiconductor innovation, warning that without strategic transformation, the region may remain confined to low-margin backend roles.
Despite notable progress in electronics manufacturing across Malaysia, Vietnam, and Indonesia, ASEAN nations remain lower on the global technology ladder, limiting their ability to climb the value chain and compete in upstream innovation. Heavy reliance on US and Chinese technologies continues to hinder the development of sovereign AI capabilities and infrastructure.
“ASEAN economies have their strengths, but they are still lower on the technology ladder,” said John Lee, Director of Consultancy at East West Futures. “Participation in AI and data centre development often hinges on compliance with US regulations and dependence on foreign cloud and chip providers.”
Malaysia’s semiconductor sector, while benefiting from the data centre boom, has missed key opportunities in mobile chip development. Fong Swee Kiang, CEO of Penang-based Skyechip Sdn Bhd, noted, “We grew during the internet era, but missed the smartphone wave. Without transformation, we risk repeating this with AI.”
Industry leaders emphasized the urgent need for ASEAN to invest in upstream capabilities, foster regional collaboration, and reduce dependency on external technologies. Failure to do so could see the region sidelined in the next wave of digital innovation.
The conference brought together top voices from Bloomberg Intelligence, East West Futures, Skyechip, the World Bank Group’s International Finance Corporation (IFC), and Maybank, highlighting a shared call to action: ASEAN must move beyond assembly and testing to become a true innovator in the global tech ecosystem.
