SOUTHEAST ASIA OUTLOOK 2025

Southeast Asia Outlook 2025: Long-Term Growth Prospects Remain Intact

INBOUND INVESTMENTS INTO SOUTHEAST ASIA CONTINUE TO GROW

The longer-term prospects of Southeast Asia and her relevance in global supply chains, are reflected by her ability to continue to attract significant levels of foreign direct investment (FDI). Singapore continues to dominate FDI inflows, driven by sustained investments in high value manufacturing. Notably, Micron Technology, a leading US semiconductor manufacturer, has recently committed to investing US$7 billion in a state-of-the art packaging facility which produces semiconductor chips crucial to artificial intelligence (AI) applications. The launch of the Johor-Singapore Special Economic Zone (JS-SEZ) could potentially drive FDI flows into both Singapore and Malaysia. The JS-SEZ is envisaged to enable a wider business ecosystem where businesses can tap on Singapore’s connectivity and expertise as a global business hub, combined with lower costs and higher availability of land in Johor. Stronger integration and partnership in the region bode well for future opportunities and investment demand in the region.

Notably, Indonesia is poised to attract record levels of FDI investments in 2024. The downstream metal industry, transportation, and telecommunications sectors were the top recipients, aligning with Indonesia’s economic transformation and infrastructure development goals. Vietnam is emerging as global electronics manufacturing powerhouse, attracting significant investments in 2024 across key areas such as semiconductors, energy storage, renewable energy etc. Amkor Technology increased its total investment to US$1.6 billion in Bac Ninh (a northern province) for advanced semiconductor manufacturing while LG Display would inject another US$1 billion into its factory in the northern port city of Hai Phong, bringing the South Korean company’s total investment in Vietnam to over US$5.6 billion.

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CUSHMAN & WAKEFIELD