ASEAN technology ecosystem in depth. In a follow-on to our APAC semiconductor reports, including the rise of China’s IC industry and opportunities from Apple’s iPhone evolution, this report updates on how ASEAN remains well positioned as an alternative for the global tech supply chain. As one of ASEAN’s most prominent sectors, the technology (semiconductor) sector has been a key economic force, driving US$406.7 bn or 29% of the total exports out of ASEAN in 2019.  

ASEAN well positioned as a hedge for global tech supply chain. As the world continues to think about diversifying its supply chain post COVID-19, ASEAN is well positioned to capture this movement. Among the 46 listed technology (semiconductor) companies which we discovered, we note that most of them are downstream EMS companies, forming 44% of the lot, though it is also interesting to note that 59% of these listed companies are located in Malaysia. Equipped with a strong foundation already, we believe there is scope for ASEAN to move up the value chain over time as capital continues to flow form the US and North Asia into the region. 

Three key themes to drive ASEAN; adding five stocks to coverage list. We believe that the best-placed stocks for ASEAN’s ecosystem rise would be those that are leveraged to Apple’s supply chain (Inari, Nanofilm), content growth in automotive/EV (Pentamaster, initiate with OUTPERFORM; Hana Microelectronics, initiate with OUTPERFORM; KCE Electronics, initiate with OUTPERFORM; and Delta Electronics Thailand, initiate with UNDERPERFORM), and 5G (Frontken, initiate with OUTPERFORM).