Asia Pacific Academy of Science Pte. Ltd. (APACSCI) specializes in international journal publishing. APACSCI adopts the open access publishing model and provides an important communication bridge for academic groups whose interest fields include engineering, technology, medicine, computer, mathematics, agriculture and forestry, and environment.
Stratification in Southeast Asia’s semiconductor supply chain: Evidence from the perspective of intra-industry trade
Vol 4, Issue 5, 2026
Download PDF
Abstract
Amidst the profound geo-economic restructuring of the global semiconductor supply chain, this study quantifies the Grubel-Lloyd (GL) index to measure the extent of intra-industry trade (IIT) for semiconductor products across six ASEAN economies during the 2021–2025 period. By employing the Grubel-Lloyd (GL) index on highly disaggregated trade data (6-digit HS codes) computed against the world, Research indicate that integration into the intra-regional production network is heterogeneous, forming a distinct multi-tiered differentiated structure. Quantitative results categorize the region into three distinct tiers: (1) High IIT (GL > 0.8) in Thailand and Vietnam, characterized by export-oriented downstream processing where high indices largely reflect processing and packaging operations conducted by foreign affiliates, albeit with positive signals of functional upgrading in supporting components; (2) Medium but mature IIT (GL = 0.616–0.836) in Singapore and Malaysia, where Singapore’s robust trade surpluses underscore its upstream dominance as a design and net component supplier, while Malaysia solidifies its midstream integration by transitioning toward advanced Assembly, Testing, and Packaging (ATP); and (3) low and volatile IIT (GL = 0.557 on the period mean) in Indonesia, reflecting an asymmetric dependence on imported inputs. The Philippines is a distinct case: Its level remains high at 0.810, but it records the steepest decline in the sample, from 0.957 in 2021 to 0.686 in 2025, indicating a progressive shift toward one-way import dependence. Based on these findings, the study argues that advancing from VIIT to Horizontal Intra-Industry Trade (HIIT) is imperative. And alongside upgrading their domestic supporting industries, human capital, and infrastructure, ASEAN countries need to forge a regional production network predicated on complementary advantages. This integration is the key for the ASEAN bloc to build a self-reliant ecosystem, enhance resilience, and ascend to higher value echelons in the global technology landscape.
Keywords
References
1. Goodman S, VerWey J, Kim D. The South Korea-Japan trade dispute in context: Semiconductor manufacturing, chemicals, and concentrated supply chains. Chemicals, and Concentrated Supply Chains (October 1, 2019). 2019. doi: 10.2139/ssrn.3470271
2. Chin MY, Ong SL, Foo LP. ASEAN-4 -China FDI and vertical intra-industry trade links amid the us-China trade war—A spatial panel analysis. Sage Open. 2026; 16(1): 21582440251410197. doi: 10.1177/21582440251410197
3. Prabheesh KP, Vidya CT. Interconnected Horizons: ASEAN’s journey in the global semiconductor trade network amidst the COVID-19 pandemic. Economic Research Institute for ASEAN and East Asia; 2024.
4. Singh J, Thornton M, Casanova R, Isaacs D. Emerging resilience in the semiconductor supply chain. 2024. Available online: https://web-assets.bcg.com/25/6e/7a123efd40199020ed1b4114be84/emerging-resilience-in-the-semiconductor-supply-chain-r.pdf (accessed on 28th April 2026)
5. Türkcan K. Vertical Intra-Industry Trade and Product Fragmentation in the Auto-Parts Industry. Journal of Industry, Competition and Trade. 2011; 11(2): 149–186. doi: 10.1007/s10842-010-0067-0
6. Liua J, Kangb S J. Vietnam’s position in semiconductor global value chains: A network analysis The Institute of Comparative Economic Studies Hosei University. 2026; (40): 23–54.
7. Pau EJJN, Yong CC. Strengthening ASEAN’s electrical and electronics sector: Enhancing regional production networks and economic resilience. Transnational Corporations Review. 2025; 17(4): 200158. doi: 10.1016/j.tncr.2025.200158
8. Xiong W, Wu DD, Yeung JHY. Semiconductor supply chain resilience and disruption: Insights, mitigation, and future directions. International Journal of Production Research. 2025; 63(9): 3442–3465. doi: 10.1080/00207543.2024.2387074
9. Jones R W, Kierzkowski H. The role of services in production and international trade: A theoretical framework. World Scientific Book Chapters. 2018. pp. 233–253.
10. Cheong I, Yoo J. A study on the characteristics of intra-industry trade for korea’s e-commerce trade. Journal of International Logistics and Trade. 2020; 18(1): 1–11. doi: 10.24006/jilt.2020.18.1.001
11. Balassa BA. Economic Development and Integration. Centro de Estudios Monetarios Latinamericanos; 1965.
12. Drèze J. Les exportations intra-C.E.E. en 1958 et la position belge. Rech Économiques Louvain. 1961; 27(8): 717–738. doi: 10.1017/S0770451800002566
13. Verdoorn PJ. The Intra-Bloc Trade of Benelux. Economic Consequences of the Size of Nations: Proceedings of a Conference Held by the International Economic Association. Palgrave Macmillan UK; 1960. pp. 291–329. doi: 10.1007/978-1-349-15210-0_19
14. Balassa B. Intra-Industry specialization: A cross-country analysis. European Economic Review. 1986; 30(1): 27–42. doi: 10.1016/0014-2921(86)90030-9
15. Balassa B. Tariff reductions and trade in manufacturers among the industrial countries. The American Economic Review. 1966; 56(3): 466–473.
16. Grubel HG, Lloyd PJ. Intra-Industry trade: The theory and measurement of international trade in differentiated products. Macmillan; 1975.
17. Yusefzadeh H, Rezapour A, Lotfi F, et al. A Study of Comparative Advantage and Intra-Industry Trade in the Pharmaceutical Industry of Iran. Global Journal of Health Science. 2015; 7(6): p295. doi: 10.5539/gjhs.v7n6p295
18. Helpman E. International trade in the presence of product differentiation, economies of scale and monopolistic competition: A Chamberlin-Heckscher-Ohlin approach. Journal of International Economics. 1981; 11(3): 305–340. doi: 10.1016/0022-1996(81)90001-5
19. Krugman PR. Increasing returns, monopolistic competition, and international trade. Journal of International Economics. 1979; 9(4): 469–479. doi: 10.1016/0022-1996(79)90017-5
20. Krugman P. Scale Economies, Product Differentiation, and the Pattern of Trade. The American Economic Review. 1980; 70(5): 950–959.
21. Lancaster K. Intra-industry trade under perfect monopolistic competition. Journal of International Economics. 1980; 10(2): 151–175. doi: 10.1016/0022-1996(80)90052-5
22. Flam H, Helpman E. Vertical Product Differentiation and North-South Trade. The American Economic Review. 1987; 77(5): 810–822.
23. Ekanayake EM, Veeramacheneni B, Moslares C. Vertical and horizontal intra-industry trade between the U.S. and NAFTA Partners. Revista de Análisis Económico-Economic Analysis Review. 2009; 24(1): 21–42.
24. Lima JED, Alvarez M. Indicadores de comercio exterior y política comercial: Mediciones de posición y dinamismo comercial. 2008.
25. Czarny E, Folfas P, Szarek-Piaskowska A. Intra-industry trade: A portrait of global patterns during 2000–2022. International Entrepreneurship Review. 2026; 12(1): 41–58. doi: 10.15678/IER.2026.1201.03
26. Li L, Wang H, Li Z, Hu S. Analysis of the structure and robustness of the global semiconductor trade network. PLOS ONE. 2025; 20(1): e0313162. doi: 10.1371/journal.pone.0313162
27. OECD. Review of the Dominican republic’s enabling environment for the semiconductor and microelectronics industries. OECD Publishing; 2026. doi: 10.1787/0b35b5a6-en
28. Tung CY. Taiwan and the global semiconductor supply chain: 2023 in review. Representative Taipei Representative Office in Singapore. 2024.
29. Yang TSW. Can southeast Asia challenge China’s dominance in mature chips? ThinkChina - Big Reads, Opinions & Columns on China. 2025. Available online: https://www.thinkchina.sg/technology/big-read-can-southeast-asia-challenge-chinas-dominance-mature-chips (accessed on 6 May 2026).
30. S&P Global Mobility. Semiconductor supply chain disruption: Unpacking the US-China Trade Conflict. S&P Automotive Insights; 2024. Available online: https://www.spglobal.com/automotive-insights/en/blogs/2024/9/semiconductor-supply-chain-disruption-us-china-trade-conflict (accessed on 6 May 2026).
31. AMRO. ASEAN+3 Regional Economic Outlook 2026. 2026. Available online: https://amro-asia.org/wp-content/uploads/2026/04/high-res-AMRO-AREO-2026-Updated-6Apr2.pdf (accessed on 28 April 2026).
32. PRF. Navigating Geopolitics & Supply Chains: An Analysis of Southeast Asia’s Semiconductor Frontier - Politeia Research Foundation. 2025. Available online: https://prfworld.org/navigating-geopolitics-supply-chains-an-analysis-of-southeast-asias-semiconductor-frontier/ (accessed on 6 May 2026).
33. Trung tâm thông tin Công nghiệp và Thương mại. Restructuring in Industry and Trade. Specialized in Semiconductor Industry. 2024. https://thongtincongthuong.vn/upload/vtic/Truyen.thong.2021/Nam.2024/n2199.pdf (accessed on 28 April 2026).
34. Genc TS. A sustainable semiconductor supply chain under regulation. International Journal of Production Economics. 2024; 278: 109426. doi: 10.1016/j.ijpe.2024.109426
35. The ASEAN Secretariat and the UN. ASEAN Investment Report 2025 - Foreign Direct Investment and Supply Chain Development. Available online: https://asean.org/wp-content/uploads/2025/10/AIR2025_rev17-Okt.pdf (accessed on 28 April 2026).
36. Wang CN, Nhieu NL, Chiang CT, Wang YH. Assessing Southeast Asia countries’ potential in the semiconductor supply chain: an objectively weighting multi-criteria decision-making approach. Humanities and Social Sciences Communications. 2024; 11(1): 1260. doi: 10.1057/s41599-024-03768-x
37. Banerjee A. Critical industries, critical risks in ASEAN supply chains. Asia Times; 2025. Available online: https://asiatimes.com/2025/11/critical-industries-critical-risks-in-asean-supply-chains/ (accessed on 19 May 2026).
38. Kurniawan H. US–Germany–Indonesia Consortium Pledges $26.7 Billion for Semiconductor Hub in Batam. Jakarta Globe; 2025. Available online: https://jakartaglobe.id/business/usgermanyindonesia-consortium-pledges-267-billion-for-semiconductor-hub-in-batam (accessed on 19 May 2026).
39. Business Indonesia. US–Germany–Indonesia Consortium to Build IDR 444 Trillion Semiconductor, Silica and Glass Facilities in Batam. Business Indonesia. 2025. Available online: https://business-indonesia.org/news/us-germany-indonesia-consortium-to-build-idr-444-trillion-semiconductor-silica-and-glass-facilities-in-batam (accessed on 19 May 2026).
Supporting Agencies
Copyright (c) 2026 Huyen Thanh Mai, Thanh Thi Nguyen, Ngoc Tran Anh, Dat Duy Nguyen
This work is licensed under a Creative Commons Attribution 4.0 International License.
This site is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
Prof. Kittisak Wongmahesak
North Bangkok University (Thailand)
The editorial team of SSD is delighted to congratulate our Editor-in-Chief, Professor Kittisak Wongmahesak, on his outstanding achievement in the Top 1000 Scholar rankings.
It is with deep regret that we announce the cancellation of the Forum on Sustainable Social Development & Computing and Artificial Intelligence, originally scheduled for June 15, 2025.
