The ASEAN Integrated Circuit: The electronics industry in ASEAN — issues and perspectives

The electronics industry provides one of best examples of growing prominence of Asia-Pacific region in world economy. The area, stretching from Silicon Valley, Cali fornia, to Singapore, has now emerged as centre of world electronics industry. The Asia-Pacific's edge in this industry began as a U.S. lead in fifties, was challenged by Japan in sixties, and was joined by East Asian countries in seventies and by some ASEAN countries later on. The Asia-Pacific electronics industry is clearly a multi-polar system. Its development principle is more ade quately described in terms of multiplication of than in terms of product cycle or international division of labour; latter expression fails to express dynamism of this open system, which explains spectacular growth of electronics industry. Several factors make electronics a new lead ing industry; its possibilities of application are so numerous that all parts of economy and society are affected in some way; drop in prices for important hardware is so rapid that high-speed diffusion can be expected. The elec tronics industry can be divided (see Figure 1) into industrial electronics (for example, com puters), consumer electronics (TV, radio), and components. A subsector of latter, micro electronics, is itself made up of passive compo nents (resistors, condensers, and so on) and active components, which can be either dis crete (diodes, transistors) or integrated (inte grated circuits). Micro-electronics has been described as the crude oil of new indus trial revolution (Financial Times, 28 March 1984), and its economic behaviour is now quite similar to that of a commodity's, with fluctua tions in prices and business cycles of three-year periods. Electronics production in ASEAN is mainly in field of consumer products and compo nents. The industry underwent considerable growth in 1970s and Singapore, Malaysia, and Philippines have become important production bases. It combines high technology with labour intensive processes. Assembly operations are common in fabrication lines for industrial and consumer electronics; in micro-electronics, early stages of silicon growing, mask making, and wafer diffusion are highly capital intensive, whereas latter stages, such as assembly and testing, are highly labour intensive. Many assembly lines are extremely complicated, making automation a very oner ous process in an industry characterized by a high obsolescence rate. However, automation does take place, either in consumer electronics (automatic insertion of components) or in