{"id":3588,"date":"2026-07-16T23:42:37","date_gmt":"2026-07-16T23:42:37","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=3588"},"modified":"2026-07-16T23:42:37","modified_gmt":"2026-07-16T23:42:37","slug":"southeast-asia-has-not-really-moved-up-the-value-chain-and-risks-missing-the-ai-boom-says-standard-chartereds-chief-asean-economist","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=3588","title":{"rendered":"Southeast Asia \u2018has not really moved up the value chain\u2019 and risks missing the AI boom, says Standard Chartered\u2019s chief ASEAN economist"},"content":{"rendered":"<div>\n<p>\u201cDespite all the talk about FDI, Southeast Asia has not really moved up the value chain,\u201d Edward Lee, Standard Chartered\u2019s chief economist and head of FX for ASEAN and South Asia, tells <em>Fortune<\/em>. Southeast Asia contributes just 6% of global intermediate manufacturing, compared with 15% for China.\u00a0<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=3586\">\u2018Criminalized for what\u2019s on your bookshelf\u2019: Hong Kong\u2019s third bookstore raid this year<\/a><\/p>\n<p>Surging demand for AI processors, and the components that go into them, is creating a windfall for companies in the AI supply chain, like Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics, and SK Hynix. On July 16, TSMC reported 707 billion New Taiwan dollars ($22 billion) in quarterly profit, a 77% jump year-on-year and significantly beating analyst expectations.\u00a0<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>Southeast Asia is present in the AI supply chain: Singapore produces semiconductors, while Malaysia is involved in chip assembly, packaging, and testing. Both Malaysia and Thailand also help assemble AI servers. Even so, the AI sector in Southeast Asia is significantly smaller than in North Asia, home to the leading semiconductor companies, AI server assemblers, and decive component manufacturers.<\/p>\n<p>Lee argues that Southeast Asian companies and governments will need to invest in AI-related research and development in order to guard against irrelevance. The Singapore government, for example, has committed over 1 billion Singapore dollars ($776 million) to fund research on fundamental AI and applied research. \u201cBut R&amp;D is costly,\u201d Lee admits.<\/p>\n<p>He cautions against generalizing how AI will affect the region. In his view, Singapore, Malaysia, and Vietnam will likely benefit from increased demand for electronics manufacturing.\u00a0<\/p>\n<p>He\u2019s less sure about the Philippines, as AI could threaten the country\u2019s business process outsourcing (BPO) industry, which contributes 8% of GDP.\u00a0<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>On July 14, the IT &amp; Business Process Association of the Philippines, a group that represents the sector, downgraded its best-case scenarios for 2028 revenue and headcount to $50.5 billion and 2.14 million jobs, down from $59 billion and 2.5 million jobs, respectively. (According to the group, the industry generated $40.3 billion in revenue and employed 1.89 million people last year).<\/p>\n<p>\u201cEvery country wants to have the next Silicon Valley or be the next AI mega-producer, but getting there isn\u2019t just a matter of snapping one\u2019s fingers or throwing money towards the industry\u2014that may not work,\u201d Lee says. \u201cUnfortunately, I don\u2019t have a silver bullet solution.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=3584\">\u2018Japan\u2019s excellence is a philosophy, a way of life\u2019: Jensen Huang wants robots to take care of an aging society with a labor shortage<\/a><\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>On Wednesday, Standard Chartered\u2019s research team lowered its global growth forecast for 2026 from 3.4% to 3.0%, pointing to \u201cconflict-induced downgrades in the Middle East\u201d. Still, the bank\u2019s economists believe that conflict risks have now peaked, and global growth will continue at a \u201cstable trot\u201d for the rest of 2026.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cThat downgrade to our global growth forecast is largely a reflection of what has already happened,\u201d said Eric Robertsen, Standard Chartered\u2019s chief strategist and global head of research, during a press briefing on July 15, though he foresaw some continued \u201ceconomic scarring\u201d from the Middle East conflict stretching into the second half of the year.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>One possible form of \u201cscarring\u201d is damage to supply chains. \u201cSome oil, natural gas and other commodities are starting to leave the Strait of Hormuz, but we have come nowhere close to normalizing\u2026 so the economies that are heavily dependent on oil, natural gas, petrochemicals and fertilizer are still facing the strains of the supply shock,\u201d Robertsen said.<\/p>\n<p>Transit through the Strait of Hormuz has been largely blocked throughout the Iran war. In recent days, a breakdown in the Iran-U.S. ceasefire has led to renewed attacks on ships from Iranian forces and a revived U.S. blockade of Iranian shipping.<\/p>\n<p>Several Asian economies could still be dragged down by an energy crisis caused by the Iran war. \u201cThe currencies which I think will perform a little bit worse are largely going to be net commodity importers like India, the Philippines and Thailand,\u201d Divya Devesh, Standard Chartered\u2019s co-head of FX research for ASEAN and South Asia, added during the bank\u2019s July 15 press briefing. \u201cIf you overlay that with a stronger dollar as well, you can expect some underperformance in those places.\u201d<\/p>\n<p>Lee thinks geopolitics is changing how global businesses approach their supply chains. \u201cGeopolitical risk is now very real,\u201d he concludes. \u201cI grew up in an age when it was just pure economics: If you could produce better and cheaper, you got the orders.\u201d<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>\u201cBut now, people are more concerned with how you produce, and attach a higher premium to geopolitics.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=3582\">Lamine Yamal is the third-youngest World Cup finalist\u2014and he was scouted from his working-class neighborhood at just 6 years old<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u201cEvery country wants to have the next Silicon Valley or be the next AI mega-producer, but getting there isn\u2019t just a matter of snapping one&#8217;s fingers.&#8221;<\/p>\n","protected":false},"author":1,"featured_media":3587,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[443],"tags":[],"class_list":["post-3588","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-standard-chartered"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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