ASEAN is attracting foreign investment, but the key chip decisions still sit elsewhere

In 2024, foreign direct investment into ASEAN rose 8% to USD 226 billion, even as global flows fell 11%. The figures come from the ASEAN Investment Report 2025, prepared by the ASEAN Secretariat and UNCTAD and published in October 2025. The report also says the regional total remained USD 5 billion below the 2022 record.

The money was not spread evenly. More than 60% of the regional inflow went to Singapore. Cambodia, Singapore and Vietnam each recorded their highest inflows on record, but ASEAN as a whole did not set a new high.

What happened

Singapore's inflow rose 6% to a record USD 143 billion. Finance remained the largest component at USD 87 billion, around 60% of the national total. The report links the decline in US investment to Singapore to activity involving holding companies and regional headquarters. An FDI number does not necessarily tell you where the productive capacity is being built. Capital can enter through a regional headquarters or financial structure without showing up as a new factory.

Elsewhere, Malaysia's inflow jumped 36% to USD 11 billion, with data centres and electronics among the drivers. Information and communication, mostly data centres, accounted for USD 5.8 billion, about half of Malaysia's 2024 inflow. Indonesia grew 13% to USD 24 billion, while manufacturing remained flat at USD 12 billion. Vietnam rose 9% to more than USD 20 billion for the first time, with manufacturing the largest recipient. The Philippines was broadly flat at USD 8.9 billion.

The semiconductor chapter makes the distinction between investment and control more specific.

ASEAN performs more than 20% of global semiconductor back-end work, which the report defines as assembly, testing and packaging. It performs less than 10% of global front-end work, including wafer fabrication. Front-end activity within ASEAN is concentrated in Singapore, then Malaysia. The report says the Philippines and Vietnam have plans to develop wafer fabrication, but those remain plans.

In the Philippines, ASE Technology operates a back-end facility that packages chips for Infineon, its main customer. Infineon supplies the integrated chips, while ASE exports the packaged chips to Infineon in the United States and Singapore. That illustrates what semiconductor investment can look like in practice. The plant is in the Philippines. The chip arrives from the customer, is packaged there, and the packaged output goes back to the customer.

The report's interviews also place some of the higher-value decisions elsewhere. It says most semiconductor multinationals keep research and development at headquarters, while some maintain smaller units at individual ASEAN sites to work with customers on design and job specifications. For a major technology requirement, the report says, a global or regional research centre supports the plant where the chip is made. The report does not attach this pattern to a named manufacturer.

Malaysia goes further into fabrication. The report lists at least five wafer foundries there as of 2024 and describes GlobalFoundries' Penang operation as supporting the group's plants in Singapore, Europe and the United States.

Vietnam's record is the 2024 inflow. Renesas established its largest overseas design facility there. As of October 2025, Infineon was establishing a chip development team in Vietnam, including functional testing and customised circuit design. These are valuable capabilities. But in both cases, the functions remain part of a foreign company's global organisation.

What it means

ASEAN is building real semiconductor capacity. Where that capacity sits in the chain is still open.

A packaging line can bring investment, jobs and technical skills without giving the host country control over which chip is supplied, where the output goes or how a major technology requirement is solved. Malaysia can host wafer fabs while individual facilities remain part of networks spanning several countries. Vietnam can attract sophisticated design work while the underlying technology remains within a global semiconductor company.

Singapore shows another version of the same distinction. It can account for more than half of ASEAN's FDI while a large share of that capital sits in finance, holding companies, regional headquarters and research.

None of this makes the investment less significant. It changes what the numbers tell us.

An incentive can influence where a company builds. A new factory can expand what a country is capable of producing. But moving the technology decision itself requires something different: local control over design, intellectual property, process technology or the research that supports the next generation of products.

The back-end and front-end shares are where ASEAN sits in the semiconductor chain. They do not yet show that the centre of that chain has moved with it.

What to watch

• The Philippine line in the companies' own filings. Whether ASE or Infineon confirms in a filing that the Philippine plant packages chips supplied by Infineon and returns the packaged output to Infineon in the United States and Singapore. The ASEAN-UNCTAD report's case box does not cite such a filing directly.

• A wafer decision taken in the host country. Whether a named front-end process in Malaysia, or a fabrication plant in the Philippines or Vietnam, moves beyond planned capacity to a technology decision governed locally.

• The regional total. Whether a later ASEAN release revises the USD 226 billion figure or the USD 5 billion gap to the 2022 peak. A record for Singapore or Vietnam remains a country-level record, not a new ASEAN high.