TOKYO — ASEAN’s exports to the U.S. topped those to China for the second consecutive quarter in the April to June period, underscoring America’s growing importance to the region as the U.S.-China trade war intensifies and China’s economy slows, prompting shifts in global supply chains.
Nikkei Asia compiled trade data primarily based on statistics from the ASEAN Secretariat and complemented by figures from national statistical agencies. Local media reports were also consulted to verify data and provide additional context.
The data shows the 10 ASEAN member countries’ exports to the U.S. reached $74 billion in the April to June quarter, up 11% from the same period a year ago, topping its China-bound exports of $71 billion, 3% higher on the year.
Among the region’s major economies, the Philippines saw the highest year-on-year increase in exports to the U.S., rising 35%, followed by Vietnam at 24% and Malaysia at 11%.
“Aside from the resilient performance of the U.S. economy, which implies more demand from most other countries, this [increase] could be a result of pivots in global supply chains away from China since the pandemic,” said Jun Neri, lead economist at the Bank of the Philippine Islands.
Neri also pointed out that “China’s prolonged lockdown [during COVID] led many countries to “reshore” or “nearshore,” moving production back home or to nearby countries.
When it comes to semiconductors and machinery, based on the World Customs Organization’s classification, Vietnam’s exports to the U.S. rose 41%, year on year, in the second quarter, followed by the Philippines, whose shipments climbed 36%. Thailand’s were up 16% and Malaysia’s rose 9%.
Washington’s restrictions on Chinese imports, particularly those imposed on advanced semiconductors in October 2022, have caused a restructuring of global supply chains that reduces dependence on China.
Vietnam is a prime a beneficiary of the U.S.-China trade tensions, drawing new foreign investment from exporters seeking to cut China out of their supply chains.
Hana Micron Vina, a South Korean chipmaker, built a factory in the northern province of Bac Giang in September 2023. According to local news outlet VnEconomy, the company plans to increase the total value of its investments in Vietnam to more than $1 billion in 2025, up from $600 million in 2022.
South Korean conglomerate SK Group bought a semiconductor manufacturing and trading company, Iscvina Manufacturing, in the northern province of Vinh Phuc in a $300 million deal. In early October, Hang Sung Won, manager of SK Group Vietnam, visited the province and announced the deal.
Northern Vietnam is close to the Chinese border, hence, many semiconductor makers and other tech companies have set up factories there, taking advantage of China’s supply chain and making it easy to export from Lach Huyen International Port, a large port that opened in 2018. Samsung Electronics also has large factories in Bac Ninh and Thai Nguyen provinces in the north of the country.
Barry Weisblatt, head of research at VNDIRECT Securities, pointed out that the strong U.S. economy alone cannot explain the growth of Vietnamese exports to the U.S., saying Vietnam is “clearly” increasing its share of the country’s total imports.
“Vietnam’s steadily improving diplomatic relations with the U.S., and Vietnam’s low-cost but highly skilled workforce” helped expand its exports, he said. “Now, the escalating U.S.-China trade war has made Vietnam’s manufacturing sector even more competitive. We expect these trends to continue regardless of who wins the U.S. [presidential] election.”
Looking ahead, Malaysia is poised to increase its semiconductor exports to the U.S. and other parts of the world as the government has been working to foster the semiconductor industry, positioning itself as a politically neutral hub for global manufacturers.
Malaysian Prime Minister Anwar Ibrahim speaks at a semiconductor event in Kuala Lumpur on May 28. (Photo by Norman Goh) In May, Malaysian Prime Minister Anwar Ibrahim announced that his the government would allocate at least 25 billion ringgit ($5.7 billion) over the next five to 10 years to develop talent and local companies.
In August, top European chipmaker Infineon began production at its largest power chip plant in Malaysia. The plant in Kulim will be the world’s biggest silicon carbide (SiC) plant when it reaches full capacity over the next five years, the company said. Infineon is eyeing demand from the renewable energy sector and applications such as electric vehicles and AI data centers.
Thailand, which has been known as the “Detroit of Asia” since the 1960s for its large auto industry, is also fostering its semiconductor industry as the industry undergoes shifts such as the move toward electric vehicles.
Additional reporting by Kim Dung Tong in Ho Chi Minh City and Ramon Royandoyan in Manila.
Sources: Nikkei Asia