The semiconductor supply chain’s last stage, the assembly, packing, and testing (APT) process, is a significant part of the China-U.S. technology competition. The United States, with only 3 percent of global APT capacity, is far behind Taiwan, which holds 58.6 percent. The U.S. aims to build a domestic APT industry, but it faces challenges due to shortages of skilled labor and lack of expertise in that segment of the supply chain. Meanwhile, Taiwan’s dominance in APT services poses a vulnerability to the U.S., especially in light of China’s growing presence. The U.S. should encourage its chip companies to invest in Southeast Asia, particularly in countries like Singapore and Malaysia, where the semiconductor industry is flourishing. There, companies can take advantage of mature ecosystems, geopolitical stability, and favorable geographic locations. By shifting focus to these regions, the U.S. could reduce its reliance on Taiwan’s APT cluster, while enhancing ASEAN’s position as a new hub of the semiconductor supply chain. This approach benefits the U.S. by reducing dependence on Taiwan, supports ASEAN’s growth, and provides Taiwanese companies opportunities for long-term expansion. All in all, this strategy is more cost-effective and realistic for the U.S. compared to attempting to build a domestic APT cluster.

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By hassani

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