At this year’s Asia Tech x Singapore, the region’s premier flagship technology event, a standout moment came from a fringe speaking panel titled, “Unlocking Southeast Asia’s AI Potential: From Multilingual Models to Market Impact”. As I listened to Temus’ AI Leader, Matt Johnson and the other panellists, three personal reflections took shape, each pointing to what it will take for ASEAN to secure its place in the global AI value chain.
ASEAN needs an interoperable AI production base
Today, all ten ASEAN states have published national AI strategies. Singapore’s NAIS 2.0 pushes practical, sector-level AI. Malaysia’s MADANI AI Framework emphasises ethical and inclusive development. Indonesia’s BRAIN project links AI to economic modernisation.
But taken together, these efforts reveal a structural problem: Fragmentation. As of 2025, ASEAN lacks aligned data protection regimes, shared compute infrastructure, or interoperable standards for AI. These gaps limit scalability and regional trust.
Against this backdrop, Europe’s aspiration for a Silicon Schengen offers a useful analogy. It envisions seamless cross-border collaboration in the semiconductor industry, mirroring how the Schengen Area enables the free movement of people. While there are no formal members, the idea draws from real initiatives like the Silicon Europe Alliance — a robust network of 12 leading technology clusters across the continent.
These clusters, focused on microelectronics, photonics, and software, bring together over 2,500 companies and research institutions—from nimble SMEs to global giants. Key hubs include Silicon Saxony in Germany, Minalogic in France, and DSP Valley in Belgium, each playing a vital role in Europe’s drive for a more integrated semiconductor ecosystem.
Southeast Asia, with its rich diversity and geopolitical complexity, doesn’t need to replicate Europe’s model, but the spirit behind Silicon Schengen is worth emulating. If you’ll allow me a little creative license, imagine an ASEAN AI Archipelago: a connected chain of digital ecosystems stretching from Jakarta to Hanoi, Singapore to Manila, giving member states the chance to shape a model uniquely their own. One not defined by uniformity, but grounded in interoperability, inclusivity, and regional relevance.
The recently-concluded inaugural ASEAN-GCC-China Summit underscored the centrality of regional cooperation and ASEAN’s growing potential as a production hub, linking Gulf capital with China’s technological strengths. It signalled the beginning of a new trilateral effort to build more resilient and diversified supply chains. Amid a fracturing global trade system, could the idea of an ASEAN AI Archipelago serve as a foundational layer in a new architecture of trade, innovation, and production for regional blocs?
Localisation must be a design principle
Before ASEAN can build a unified, AI-enabled production base, it must first secure two essentials: local relevance and workforce readiness. AI in this region doesn’t thrive on scale or technical sophistication alone—it succeeds when it is trusted, usable, and adapted to the rhythms of local businesses and communities.
This is what makes SEA-LION, Southeast Asia’s first multilingual large language model, so important. Trained on Bahasa Indonesia, Vietnamese, Thai, Tagalog, and English, it was built not only to understand language, but to operate efficiently on local infrastructure, even for smaller businesses. That matters deeply in ASEAN, where SMEs make up 97 per cent of all enterprises and employ over 85 per cent of the region’s workforce. If AI cannot work for SMEs, it cannot work for ASEAN.
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The stakes are rising with the emergence of Agentic AI, systems capable of acting autonomously, not just making predictions. These tools promise to transform how work gets done, but their success is far from guaranteed. In Southeast Asia, 75 per cent of failed AI deployments can be traced to poor cultural and operational alignment.
And while 85 per cent of businesses in the region now recognise that localisation, beyond language, into workflows and business norms, is essential, adoption remains uneven. Without addressing these gaps, AI will remain concentrated in large enterprises, bypassing the SME backbone that powers the regional economy.
Singapore offers a preview of what’s possible when policy, partnership, and capability-building align. In 2023, thousands of local SMEs adopted AI tools, and the national target is to raise this number to 15,000 by 2026. Over 8,000 mid-career professionals have already completed structured AI training through public programs.
At Temus, we’ve contributed to this effort through a strategic partnership with AI Singapore, working directly with local organisations to prepare datasets, implement practical AI tools, and sustain them in real-world environments. Our collaborative programs, including AI for Leaders and the AI Apprenticeship Programme, are designed not just to educate, but to embed lasting capability. By 2025, over 30 AI apprentices had been hosted at Temus, gaining firsthand experience while helping organisations build capacity from within.
AI adoption requires a resilient semiconductor backbone
None of this is possible without chips. ASEAN Semiconductor Market is estimated to reach SG$67 billion by 2032. Singapore contributes 11 per cent of global semiconductor assembly, testing, and packaging (ATP) capacity, while Malaysia adds another 7 per cent. Vietnam and the Philippines are rapidly scaling their capabilities, bolstered by foreign investment and industrial park expansion.
But the real promise of an ASEAN AI Archipelago lies in integration.
The Johor–Singapore Special Economic Zone (SEZ) exemplifies this complementarity in action. Singapore leads with strengths in IC design, R&D, and advanced manufacturing. Johor, directly across the Causeway, offers scalable land, cost-competitive labour, and logistics infrastructure. Just north of the SEZ, Penang, home to more than 350 electronics firms, including Intel and AMD, adds vital capacity in wafer fabrication, assembly, and back-end testing.
These nodes are tied together not just by geography, but by policy coherence. Mutual recognition of professional qualifications, streamlined customs procedures, and flexible labour mobility enable cross-border teams and supply chains to function with agility.
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In a world of rising geopolitical tension and tightening export regimes, ASEAN’s integrated production corridors offer something rare: Optionality. For global chip firms like Nvidia, that could be existential.
Nvidia’s greatest vulnerability is not technological, it’s geopolitical. Its AI chips depend on a complex global supply chain: design and IP from the US; wafers from Taiwan and Japan; EUV lithography from ASML in the Netherlands; fabrication at TSMC; packaging and testing in South Korea, Malaysia, and Vietnam.
Finally, Southeast Asia’s logistics hubs move these high-value chips into data centres and markets around the world. As export controls tighten and chokepoints multiply, Nvidia, and others, must redesign for anti-fragility. That means investing across ASEAN for strategic depth. Partnerships in Singapore, Malaysia, Vietnam, and Thailand offer distributed resilience.
At the same time, encouraging ecosystem partners like TSMC and Samsung to expand their advanced packaging operations across Southeast Asia, investing in local talent and collectively, establishing a semiconductor backbone, or a corridor, if you like.
Insights from Echelon Singapore 2025
Whether through an ASEAN AI Archipelago or another model of regional integration, Southeast Asia’s role in the global AI value chain must evolve, from serving as a low-cost transit point to becoming a critical node for innovation, production, and resilience.
These themes took centre stage at Echelon Singapore 2025, where I had the privilege of moderating a panel titled “Building in the Semiconductor Age: What Tech Founders Need to Know About Supply Chains, Partnerships, and Strategic Positioning”.
Joined by Teong Wei Tan (Infineon), Chan Yip Pang (Vertex Ventures), and Jinsong Xu (Innowave Tech), we explored how founders across Southeast Asia can ground their innovation efforts in strong semiconductor foundations, strategic partnerships, and a skilled regional workforce.
The discussion reinforced one key takeaway: ASEAN’s future in AI will be defined not just by what we build, but by how we build together.
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