In the wake of the US-China trade war launched during former President Trump’s first term, and the subsequent “friendshoring” policy promoted by the Biden administration, Asia has witnessed a sustained relocation of manufacturing bases and the rise of Southeast Asia’s semiconductor industry.
Fueled by innovations in generative AI and advanced packaging processes, the electronic equipment sector has surged to become the leading segment in Taiwan’s machinery export landscape.
In the wake of the US-China trade war launched during former President Trump’s first term, and the subsequent “friendshoring” policy promoted by the Biden administration, Asia has witnessed a sustained relocation of manufacturing bases and the rise of Southeast Asia’s semiconductor industry.
Fueled by innovations in generative AI and advanced packaging processes, the electronic equipment sector has surged to become the leading segment in Taiwan’s machinery export landscape.
However, this transformation has also brought structural risks. Taiwan’s export market is increasingly tilted toward the US, with 2024 seeing a record high in exports to the United States—turning Taiwan into America’s sixth-largest trade deficit partner.
If Trump were to return to office and enforce a “reciprocal tariff” policy, Taiwan would be among the first affected, alongside other countries such as Vietnam, Indonesia, Malaysia, Thailand, and Singapore.
Taiwanese firms, whether exporting directly or indirectly to the US, would face broad tariff impacts.
An analysis of the semiconductor supply chains in Southeast Asia reveals that only Malaysia and Singapore currently operate wafer fabrication plants.
Malaysia hosts seven fabs (mainly 8-inch, with some 6-inch), focusing on back-end processing; Singapore, with 16 fabs (mostly 12-inch and 8-inch), specializes in front-end processes.
Singapore accounts for 5% of global wafer production and 11% of the semiconductor industry, with 20% of global semiconductor equipment reportedly manufactured there.
Facing Tariff Shock: TEEIA Diversifies Market Strategy
The Taiwan Electronic Equipment Industry Association (TEEIA) has long anticipated this shift.
Since the post-COVID in 2023, TEEIA has actively explored Southeast Asian markets, assisting member companies in relocating production and strengthening supply chain resilience.
TEEIA has visited Malaysia’s Penang and Kuala Lumpur (focusing on back-end packaging and testing) as well as Singapore (front-end processing), while also attending local exhibitions and engaging with buyers.
According to Chairman Lin Shih-Ching, TEEIA’s long-term efforts to diversify market development have begun to yield results.
From earlier participation in SEMICON WEST (USA) and SEMICON China, to more recent outreach in Southeast Asia, and now looking to Germany and Japan as future growth markets, the association continues to pave the way for Taiwan’s semiconductor equipment sector.
Amid the AI-driven demand for advanced processes such as CoWoS, FOPLP, and silicon photonics, Taiwan’s strength in back-end packaging automation is generating new opportunities.
With global trade dynamics shifting, firms like ASE and SPIL are not only partnering with TSMC in the US but are also responding to American clients’ preferences to lower costs via local packaging solutions.
Malaysia, inheriting European expertise, is poised to upgrade its back-end technologies—with Taiwanese firms playing an important role in that evolution.
TEEIA suggests that the government should leverage Taiwan’s strengths in semiconductors and ICT to offset the vulnerabilities faced by traditional SMEs amid tariff shocks.
This shift may accelerate overseas expansion for Taiwan’s packaging and testing companies, creating equipment opportunities for TEEIA members such as YCM and Habor.
As long as machine precision and surface cleanliness meet industry standards, TEEIA can connect Taiwanese machine tool manufacturers to global demand.
SEMICON Southeast Asia Set to Launch – Taiwan Pavilion Highlights Innovation
With the 30th SEMICON Southeast Asia exhibition to be held in Singapore this May, the event will feature suppliers of semiconductor equipment, materials, and services from around the world.
TEEIA’s participation aims to showcase Taiwan’s dynamic packaging, testing, and smart manufacturing capabilities to Southeast Asian markets, addressing tariff-related trade barriers in the process.
This year, Taiwan will expand its pavilion to include 52 companies, up from 47 in 2024. TEEIA will also collaborate with the Bureau of Foreign Trade and the Precision Machinery Research & Development Center (PMC) to organize a Taiwan Image Pavilion under the theme “Sharing, Collaboration, and Co-prosperity – Linking Taiwan’s Semiconductor Strengths with Global Opportunities.”
Seventeen TEEIA members will join the collective effort to foster greater ties with major players in Germany, Japan, and Southeast Asia.
The pavilion will host product launch events, one-on-one business matchmaking sessions, and media interviews to support trade promotion in the ASEAN market.
Ten global media outlets have been invited to cover up to 40 matchmaking sessions on the theme of ‘Linking Taiwan’s Semiconductor Strengths with Global Opportunities.’
A pre-show networking dinner will also be held, inviting local associations and industry partners to enhance engagement between Taiwanese companies and Southeast Asian supply chain stakeholders.
At least 40 local buyers and association representatives are expected to attend eight scheduled product launch events—enabling targeted business matching and accelerating overseas opportunities for Taiwanese firms.
