Rising demand for electrricity due to information and communication technology (ICT) supply chain migration from China into Vietnam over the past few years is putting Vietnam in a conundrum — power supply shortages during the sweltering heat and drought season have started to force companies such as Foxconn to slow down their production in the Southeast Asian nation.

Power shortages are a nightmare to many industrial companies. When TSMC chairman Mark Liu recently was asked about how TSMC would solve the problem if Taiwan can't generate enough electricity at a shareholders' meeting, he euphorically said that they can only "trust" the government will fulfill its promise that there will be no shortage of electricity. Now power shortage is not only a worry shared by Taiwanese manufacturers, it is actually happening in Vietnam.

Cadence Design Systems, Inc. (Nasdaq: CDNS) and Saigon High-Tech Park (SHTP), the leading high-tech hub in Vietnam, today announced a collaboration to foster electronic design expertise and advance the semiconductor industry in Vietnam. Through the collaboration, Cadence plans to explore the opportunity to provide its IC design software tools and relevant training programs to local universities through the Cadence Academic Network.

Taiwan-based PCB maker Zhen Ding Technology has drawn plans to expand its production capacity worldwide. According to company chairman Charles Shen, in addition to its existing factories in China, Taiwan, and India, the company is looking at additional production sites in Southeast Asia.

Catcher Technology is nearing the end of site acquisition discussions and may begin work on a new factory in Vietnam in the second half of this year, according to Allen Hung, chairman of the chassis maker.

Indonesia's largest taxi operator will turn to BYD Co. for 80% of its electric-vehicle fleet while reviewing its Tesla Inc orders as lower-cost models win out in the country.

Judging from India, Vietnam, and Thailand's present import-export structures for semiconductors and electronics, we can imagine what the future ecosystem will be like. Major ASEAN countries import semiconductors mostly through the logistics services providers in China and Hong Kong. But neither China nor Hong Kong has its home-grown distributors who can handle international sales. It's Taiwanese companies that are playing the key role behind the scene.

Vietnam's electric-car maker VinFast recalled all 999 of its initial sport utility vehicles shipped to the US over malfunctioning software that can lead the main screen to go blank.

Hyundai Motor and LG Energy Solution have embarked on a joint effort to scale up in the US. The pair announced on May 26 that they will build an EV battery cell plant together in Georgia. Production is expected to begin at the end of 2025.

According to Counterpoint's monthly Indonesia smartphone tracker, Indonesia's smartphone shipment for the first quarter of 2023 saw a 7.6% YoY decrease. The reason is a 25.8% YoY decrease for mid-to-high-end models. Meanwhile, entry-level models experienced a 2.7% YoY increase.

Generally speaking, distributors categorize their customers into TBMs (Taiwan-based manufacturers), CBMs (China-based manufacturers) and MBMs (multination-based manufacturers). Production bases are being moved to ASEAN and South Asia, with large parts of their components supplies still coming from China and Hong Kong. But the major manufacturers remain Taiwanese. Semiconductors seemingly imported from China and Hong Kong actually come from Taiwanese makers. The OEMs still play an important role in determining how the components are distributed.

Marvell Technology has announced plans to establish a world-class design center in Ho Chi Minh City. The facility will house advanced semiconductor engineering and will be a top technology workplace for those looking to upgrade their skills and careers, according to the US chip vendor.

South Korean Trade, Industry and Energy Ministry announced on May 23 that the government and local automakers will invest KRW14.3 trillion (US$10.9 billion) in the automotive component industry, helping EV production grow fivefold by 2030.

Taiwan-based OSATs such as ASE Technology, and IC test interface specialists including Chunghwa Precision Test Tech (CHPT) and WinWay Technology, have all expanded their operations in Southeast Asia to meet rising demand from the local IC industry, according to industry sources.

Boasting favorable government policies, lower overall labor costs, burgeoning local semiconductor actors such as Viettel, Vingroup, and FPT, Vietnam is garnering more than mere attention from international firms.