The booming semiconductor landscape in Asia Pacific

• Asia’s semiconductor boom fuels demand for industrial space and data centers: The semiconductor industry thrives amid a perfect storm of growth as EVs capture over 20% of the global car market in 2024, cloud spending in key APAC markets projected to more than double in 5 years, and AI infrastructure demand reaches unprecedented levels.
   

• AI accelerates chip innovation and optimizes the chip design process: Artificial intelligence (AI) and machine learning are revolutionizing chip design, improving productivity and reducing the cost and time to market significantly.
   

• Semiconductor talent access to drive chip plant decisions: The demand for chips is growing, widening the talent gap. The availability of a skilled labor pool is becoming a decisive factor in choosing where to build new semiconductor fabrication plants.
   

• The sustainability imperative: The growing demand for AI technologies is intensifying the urgency for semiconductor companies to address sustainability concerns in chip manufacturing. An experienced facilities management partner is key to identify areas of improvement and maintain facilities at optimum efficiency.

1.  Automotive chips to maintain growth trajectory 
 

The automotive sector, particularly the rise of electric vehicles (EVs) and their use of advanced driver-assistance systems (ADAS), continues to be a significant growth driver for the semiconductor industry in Asia.

Despite recent economic headwinds putting pressure on the automotive sector, it continues to show resilient growth, with the share of EV sales in the global car market exceeding 20% in 2024, according to IEA.   

Mainland China, with the largest EV market share globally, is a critical driver for the semiconductor industry in the region. In 2024, 11.3 million EVs were sold in China, increasing by 40% y-o-y. Although China’s total volume of EV sales far exceeds the rest of the region, other APAC countries are also seeing a strong uptick in EV sales growth, notably in the Southeast Asian countries Indonesia, Malaysia and Vietnam, which marked more than 100% y-o-y growth in 2024.

Chip demand is expected to grow as global EV sales remain on an upward trend. Conventional vehicles will also contribute to increased chip demand for safety and convenience features like navigation systems and infotainment.

Despite the spotlight on leading-edge chips, mature node chips are indispensable for automotive electronics, and many global players continue to commit investments in this area – for example, GlobalFoundries opened a USD5 billion wafer fab facility in Singapore with a focus on the automotive end-market.  

2. Digitalization drives cloud computing
 

The rise of cloud computing is driven by the need to increase business agility and competitiveness. As organizations embrace AI, they require high-performance infrastructure, and cloud services provide the foundation. This is fueling demand for scalable infrastructure and cloud-based solutions, contributing to the growth of the cloud computing market.

Governments and businesses in APAC are investing heavily in cloud infrastructure to support the digital economy. Cloud providers are actively expanding their data center capacity, but surging demand is still expected to outpace near-term supply, according to JLL’s 2025 Global Data Center Outlook.

3. Explosive surge in demand for AI infrastructure
 

AI has permeated nearly all industries ranging from manufacturing to healthcare. Demand for advanced computing power is at unprecedented levels and underpinning that are the semiconductor chips powering the increasingly complex AI models.

The Asia-Pacific region is at the center of the semiconductor manufacturing industry. Taiwan, with TSMC as the world’s largest chipmaker, stands out in the region as a powerhouse in semiconductor production, while other APAC countries are also seeing massive opportunity to expand their market share and technological capabilities. However, production of leading-edge chips is currently still dominated by TSMC, and supply is limited.

As demand soars for more and more processing power in response to the AI boom, amid graphics processing unit (GPU) supply bottlenecks, a new category of cloud providers known as neoclouds have come into play to address the need for more AI infrastructure. 

Neoclouds specialize in GPU-as-a-service, offering access to powerful GPUs at competitive prices. With many businesses in APAC undergoing rapid digital transformation, neoclouds provide a flexible and scalable platform to support this transformation, and are especially positioned to meet AI workload demands.

Neoclouds have attracted substantial investment, and are starting to establish a presence in APAC. In 2025, Nebius announced plans to expand its AI infrastructure operations into Southeast Asia, with Singapore as a potential regional hub.

AI accelerates chip innovation and optimizes the chip design process
 

The surge in demand for AI applications, particularly generative AI and agentic AI, is propelling a corresponding need for computational power, high-speed memory and storage solutions. AI, in turn, is driving innovation in chip design and architecture, as well as creating opportunities for disruption in the industry.

As Moore's Law approaches its physical limits, the industry is shifting from traditional scaling to more innovative approaches in chip design.

Two emerging trends are particularly noteworthy:

• AI accelerators: These specialized chips are designed to optimize AI workloads, offering significant performance improvements over general-purpose processors for AI tasks.
  
  
• Artificial Intelligence and Machine Learning (AI & ML): Besides driving the demand for chips, AI & ML are revolutionizing chip design, facilitating the creation of unconventional designs that surpass the performance of even the best standard chips. It can also reduce the cost and time taken to market significantly.
   

AI & ML can be integrated as a copilot for the chip design process, for example automating tasks like chip layout optimization, which can improve productivity and reduce development time, especially important as the complexity of chip design increases. This can augment the capabilities of the human engineers and free up scarce talent resources to focus on higher-level work. 

Talent acquisition and retention is a key concern across semiconductor value chain segments
 

Industry forecasts project a need for one million new semiconductor talent globally by 2030 while retaining the existing workforce.

The talent shortage is an acute problem in APAC, exemplified by Japan's need for 43,000 engineers by 2030 and South Korea's projected 56,000 shortfall by 2031, which may threaten the semiconductor industry's expansion. In the past three years, Taiwan has struggled to fill its engineer positions, a problem intensified by the localization trend as vital players like South Korea and Japan prioritize developing domestic talent while also attracting foreign talent for specialized work and training.

A talent gap persists in the semiconductor industry, in part due to a lack of STEM interest in some countries. For example, Malaysia’s goal of 60% student enrolment in STEM fields remains unmet, although it has risen to just above 50% in 2024. Compounding this challenge, the chip industry also faces stiff competition for talent from adjacent tech sectors.

Governments are stepping in to address the issue, integrating talent attraction policies into their initiatives. For example, the Penang state government in Malaysia has launched the Penang Silicon Design @5km+, with projects aimed at training engineers and reskilling manufacturing talent for chip design. Companies are also investing in programs to develop engineering talent where skilled manpower is scarce – Micron in Singapore is partnering with local institutes of higher learning to attract students to relevant fields of study.

With talent scarcity potentially leading to costly project delays, the availability and sustainability of the local talent pool is becoming a critical factor in deciding the locations of new semiconductor fabrication plants.

Sustainability commitments are pushing chipmakers to implement ESG practices in their facility operations
 

Semiconductor manufacturing is a highly resource-intensive process, characterized by significant energy and water consumption, as well as substantial greenhouse gas emissions. Projections from Greenpeace estimate that the industry will generate 86 million metric tons of carbon dioxide equivalent by 2030.

The demand for semiconductors is expected to surge in the coming years, primarily driven by the growing demand for AI. According to Greenpeace, this increasing demand translates to a projected global electricity consumption of 237 terawatt hours (TWh) for semiconductor manufacturing by 2030.

A single semiconductor fabrication plant can use up to 10 million gallons of water per day, most of it used in the manufacturing process. Water is essential to clean and rinse the semiconductor devices at various steps and is also used in cooling systems to maintain the manufacturing equipment at optimal operating temperatures.

Given the increasing importance of ESG considerations, many semiconductor firms are making commitments to sustainability goals. For example, TSMC is collaborating with its suppliers to procure renewable energy, and GlobalFoundries’ Journey to Zero commitment involves aiming for net-zero GHG emissions and 100% carbon-neutral power supply by 2050.

As part of efforts to meet these sustainability goals, companies commonly aim to improve energy and water efficiency in day-to-day facility operations. For example, a US computer giant reuses wastewater generated during chip manufacturing for landscape irrigation at its facility in China, reducing utility consumption by up to 30%.

The semiconductor boom in APAC, fueled by EVs, cloud computing, and AI, presents a unique opportunity for growth, but also demands agile and strategic real estate solutions. Corporate Real Estate (CRE) partners provide crucial expertise in site selection, sustainable design, and talent attraction, ensuring companies can capitalize on this opportunity while minimizing environmental impact.

CRE professionals act as enablers, positioning semiconductor companies to thrive in this dynamic and competitive market with the following services:
 

• Identifying optimal locations
  
  
• Providing strategic design and project management solutions, for cost-effective and timely project delivery
  
  
• Implementing efficient facility management practices to optimize energy and water usage
  
  
• Creating workspaces that attract top talent