Southeast Asia exported nearly $300 billion in electronics and electrical equipment last year, according to data from the International Trade Center (ITC). This makes electronics the region’s largest export sector by a substantial margin. It is also the largest export sector for several individual countries, including Malaysia, the Philippines, Singapore and Vietnam.
The six countries in the table below accounted for almost all of Southeast Asia’s electronics exports last year. Singapore, the region’s leading exporter of electronics, owes its top position to its status as a global shipping and business hub. Roughly 2/3rds of total electronics exports consist of products that are imported and then “re-exported” without any further processing or assembly. Actual in-country production of electronics is comparable to that of Malaysia and Vietnam.
Unlike Singapore, most other Southeast Asian countries derive the bulk of their electronics export revenues from local production and assembly work. Between 2009 and 2013, production grew strongly in most countries, but absolutely skyrocketed in Vietnam, which became a regional electronics production powerhouse in just a few short years of rapid expansion. Growth was driven primarily by a group of major multinational companies, including Samsung and Intel, which set up production and assembly facilities in the country.
Like Vietnam, Cambodia also saw skyrocketing electronics production over the past five years, but total exports remain relatively low for the region. Despite nearly 3000% growth in exports since 2009, the country produced only $200 million of electronics and electrical equipment last year. More than half those exports consist of low-end parts, such as insulated wire and fuses.
Southeast Asia exports a diverse range of electronics and electrical equipment, but overall revenues are driven by a shortlist of key sub-sectors. As shown in the table below, the largest export sub-sector is “electronic integrated circuits and microassemblies” (HS code: 8542) which accounted for $132.8 billion in export revenues, almost half of all electronics exports for the region.
Most of the integrated circuit and microassemblies exports in 2013 came from Singapore and Malaysia, which shipped $83.1 and $27.8 billion respectively that year. In both countries, this sub-sector was the leading source of electronics exports revenues. The same was true in nearly all other countries except Vietnam, where electronics exports were dominated by phone equipment. Considering the massive investments in Vietnam made by handset manufacturers like Samsung and Nokia, this comes as little surprise.
Rapid growth in electronics manufacturing across the region can be attributed to several factors, including low labor costs and proximity to China, the world’s largest producer and exporter of electronics. Components produced in China and elsewhere in the region can be quickly and inexpensively shipping to Southeast Asia, where they can be processed, assembled or otherwise altered into finished or semi-finished products.
Can Southeast Asia continue to attract global manufacturers and play an increasingly large role in the global electronics supply chain? What countries and sub-sectors will generate the most opportunity? Given the importance of the electronics industry for the ASEAN economy, BDG takes ongoing interest in these questions. Check back again for further analysis of this topic.