Thailand's Ministry of Higher Education, Science, Research, and Innovation launched its new semiconductor strategy, dubbed "Siam Silica", in late July 2026. The plan sets concrete and realistic targets. Yet it leaves one critical gap: Bangkok has not aligned sufficiently with the US economic security agenda, and that omission could determine whether Thailand becomes an indispensable node in regional semiconductor supply chains or falls further behind.

Thailand currently ranks as Southeast Asia's fifth-largest semiconductor exporter, shipping more than US$10 billion of finished chips in 2024. That figure equals 10% of Malaysia's exports and 6% of Singapore's, the two regional front runners. Thai exports have been mostly flat for over a decade. The Philippines and Vietnam, which both exported less than Thailand as late as 2016, have overtaken it: Philippine exports are now more than double Thailand's as of 2024, and Vietnam has become the most favoured destination in Southeast Asia for semiconductor supply chain investment outside Malaysia and Singapore. An intervention was necessary for Thailand to stay relevant in the regional race.

The policy's targets are specific. By 2030, Thailand aims to establish one semiconductor fabrication facility, two additional advanced packaging facilities, and eight integrated-circuit design companies. It also plans to train just under 3,000 new semiconductor specialists. The strategy rationalises what was previously a fragmented policy ecosystem across the government apparatus and adds a regional dimension: a skills development pipeline built in concert with other Southeast Asian states, plus scaled-up research and development cooperation at the regional level. Lowy Institute research has recommended precisely this kind of regional cooperation to drive integration and avoid policy duplication as among the most effective interventions for Southeast Asian governments expanding semiconductor activity.

The problem sits outside the policy's current scope. For years, US economic security objectives have sought to exclude China from benefiting from advanced semiconductor innovation originating in the US. Washington has drawn red lines around Chinese access to semiconductors built on US intellectual property, epitomised by export controls under the "small yard, high fence" policy. Whatever the policy's flaws, a near-term shift in US priorities seems unlikely, and Southeast Asia needs to position itself within the US economic security umbrella.

Southeast Asia, Thailand included, has been a consistent source of leakage for US export controls. Weak institutional capability to enforce sophisticated, US-aligned export controls has made the region a porous border, enabling illegal smuggling of advanced semiconductors to China. Bloomberg reported in May 2026 that the US suspects Nvidia chips were smuggled to Alibaba via Thailand. This situation is no longer sustainable.

Malaysia has recognised the problem. Its customs department seized AI chips worth nearly RM53 million at Kuala Lumpur International Airport in June 2026, part of serious efforts to align with Washington's interests. Thailand has not made comparable moves. If Bangkok is serious about developing stronger capabilities across the semiconductor supply chain, it will need to follow Malaysia's example.

The stakes are measurable. The US and its allies represent over 90% of total foreign direct investment into Southeast Asia's semiconductor supply chain since 2003. For Thailand specifically, the figure exceeds three-quarters. Despite plummeting regional opinion of the US as a trusted partner, for semiconductors the US remains indispensable.

China offers no alternative. Its indigenous semiconductor industry is becoming an increasing source of competition for Southeast Asia, ASEAN's trade balance in semiconductors with China is reversing, and China remains an insignificant investment partner in the sector. That leaves the region little option but to align with the US and its allies.

The trade deals Southeast Asian governments signed with the Trump administration in 2025 marked the first explicit attempts to pull the region into Washington's economic security orbit. Critical minerals dominated those negotiations, but semiconductor supply chains represent the more substantial growth opportunity for Southeast Asia, and the US is arguably the more salient partner for an industry of this economic consequence. While the region resists choosing sides in the broader US-China contest, it has little choice when it comes to semiconductors.

Thailand must internalise that reality. Siam Silica rests on sound foundations: human capital development, achievable capacity expansion, and regional integration. But without alignment with US export-control priorities, the strategy risks leaving Thailand outside the supply chains it aims to join.