Southeast Asia Electronics Supply Chain Set Sights Towards Smart Manufacturing

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Southeast Asia is a region that is fast developing. It has evolved from an agricultural society to one of the fastest growing regions in the world within the span of a century. One of the main drivers of such growth is Southeast Asia's position as a cost competitive manufacturing hub. Removing cost out of operations is key to cost competitiveness. As Southeast Asia continues to accelerate human capital value add, the key to retain a cost-efficient manufacturing hub will need to be abstracted from higher productivity and yield. To that end, Southeast Asia E&E manufacturing is setting its sight on digital technologies related to Industry 4.0.

A report by McKinsey & Company highlighted that Southeast Asia needs to embrace Industry 4.0 to unlock its potential in manufacturing. It claims that disruptive technologies associated with Industry 4.0 would have an impact on productivity on a similar scale that the introduction of the steam engine had during the first Industrial Revolution. Globally, if the digital technologies of Industry 4.0 were to be embraced and integrated efficiently, it is forecasted that it could contribute between US$1.2 trillion and US$3.7 trillion in gains.

According to Ng Kai Fai, President of SEMI Southeast Asia, "We see a rise in Southeast Asia countries embracing smart manufacturing or Industry 4.0. Hitachi opened a smart factory hub in Thailand a few months ago. Singapore launched the world first's Smart Industry Readiness Index to catalyse the transformation of industrial sectors during this 4th Industrial Revolution. India launched the Make in India initiative to encourage MNCs and other companies to manufacture their products in India. The new government of Malaysia in its recent Budget 2019 tabling, announced a National Policy on Industry 4.0 named Industry4WRD, to support the industry's efforts to rely more on technology and less on capital and labour, to increase productivity. Thailand is embarking on Thailand 4.0 on similar ground."

"Clearly, transitioning to smart manufacturing for the Southeast Asia region is no longer a question of how but a question of when, given the pivotal nature this industry has to the region's economic well-being. At the same time, we need to be aware of the many potential pitfalls surrounding it. A possible step forward is for the region as a bloc to formulate a unified plan when adopting the various technologies associated with Industry 4.0 as it pushes for a more resilient and innovative economic community."

"SEMI, the global not-for-profit association advancing the global electronics manufacturing supply chain, has organised a host of activities and events to bring smart manufacturing discussions to the forefront. We recently concluded a two-day conference in Singapore focusing on smart manufacturing and smart data where we discussed the potential of incorporating these concepts into practice and explored the challenges of adoption. In SEMICON Southeast Asia 2019, which will be held from 7-9 May 2019, there will be a showcase of Electronics Manufacturing Smart Factory focusing solely on smart manufacturing and smart data in practise."