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Opinion
How Southeast Asia’s solar industry can shine in face of US tariff threat
- As trade tensions and protectionism mount, Southeast Asia can sustain its solar manufacturing boom by hastening domestic energy transitions
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As Southeast Asia strives to become an “epicentrum of growth”, the green technology manufacturing sector – particularly solar photovoltaics (PVs), lithium batteries and electric vehicles (EVs) – will be key components in this endeavour.
The progress so far is impressive. Southeast Asia has emerged as the world’s second-largest solar module producer, trailing only China. By the end of 2022, the region boasted a total module production capacity of 70 gigawatts, a significant leap from an almost negligible level just a few years ago. This capacity represents roughly 6.4 per cent of the world total of about 1,100GW expected by the end of this year.
Moreover, Southeast Asia has shown remarkable progress in increasing its share in supply chains, particularly in solar cell manufacturing, led by Malaysia, Thailand and Vietnam. Malaysia has also made significant strides in polysilicon production, reaching a capacity of 32 gigatonnes in 2022.
The main driving force behind this progress has been the export market. Southeast Asia has surpassed China as the preferred destination for manufacturing investment from Organisation for Economic Cooperation and Development countries seeking supply chain diversification. It has also seen substantial inflows of Chinese investment in the solar PV and battery sectors, leveraging its wealth of natural resources.
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