Global semiconductor sales hit new record, up 3.2% QoQ in Q2
On July 30, 2026, the Semiconductor Industry Association (SIA) released data showing global semiconductor sales reached $187.6 billion in Q2 2026, up 3.2% QoQ and 18.5% YoY, a quarterly record. AI chips, automotive electronics chips, and memory chips saw sustained strong demand, driving market growth.
By region, the Americas led with 22.1% YoY growth, Asia Pacific/Other (including SE Asia) grew 17.8%, and Europe 14.2%. China's semiconductor market, driven by import substitution policies, grew 16.3% YoY, maintaining its position as the world's largest single market.
SE Asia packaging/test capacity full, benefiting from supply chain shift
Amid regional restructuring of the semiconductor supply chain, SE Asia has become the core destination for packaging/test capacity transfer due to cost advantages and geographic location. Data shows in Q2 2026, packaging/test capacity utilization in Thailand and Malaysia reached 92% and 90% respectively, above the global average of 85%. The Thai Electronics Industry Association noted orders from global IDMs and OSATs are booked through end-2026, with some advanced packaging lines requiring 6-month advance reservations.
Penang, Malaysia, the "Silicon Valley of the East," is accelerating foreign investment. Intel's 3D packaging plant in Penang started production in April 2026 with a monthly capacity of 30,000 12-inch equivalent wafers. Meanwhile, a new advanced packaging park in Rayong, Thailand attracted investment from multiple Chinese packaging/test firms, including JCET and Tongfu Microelectronics, both planning to complete Phase 1 by 2027.
Thailand's semiconductor industry enjoys policy benefits
The Thai government launched the "Chip 4.0" incentive plan in May 2026, offering up to 50% investment subsidies for packaging/test and wafer fab segments, and an 8-year corporate income tax exemption. The policy has attracted over 120 billion baht (approx. $3.4 billion) in industry investment commitments. Japan's Tokyo Electron and Singapore's United Technology separately announced plans to establish equipment maintenance centers and packaging bases in Thailand. The Thai Board of Investment expects the semiconductor industry to account for 3.5% of GDP by 2030.
AI and auto chip demand continues to drive growth; structural opportunities emerge
By end-use, AI chips are the fastest-growing segment. Global GPU and AI accelerator sales reached $42 billion in Q2, up 35% YoY. Orders from NVIDIA, AMD, and Huawei are booked through 2027, driving surging demand for HBM high bandwidth memory chips. SK hynix and Samsung Electronics both announced HBM4 memory mass production, with SK hynix's packaging plant in Malaysia already shipping in volume.
For automotive chips, as new energy vehicle penetration rose to 35%, demand for automotive MCUs, IGBTs, and sensor chips grew steadily. Q2 automotive chip sales rose 22% YoY to $28 billion, with fastest growth in China and SE Asia. Power semiconductor makers like Infineon and onSemi saw capacity utilization exceed 95% in SE Asia.
Industry cycle outlook: second half of upcycle, watch structural imbalances
From a semiconductor cycle perspective, the industry is in the second half of the upcycle. Inventory levels have declined from the end of 2025, but different segments show divergence. 8-inch capacity remains fully loaded due to automotive and industrial demand, while 12-inch mature process utilization is around 80%, and advanced nodes (7nm and below) remain tight. TSMC's 3nm capacity utilization reached 98% in Q2, but the company has warned of potential overcapacity in 2027.
On investment strategy, analysts recommend focus on SE Asia packaging/test and equipment/materials in the AI chip supply chain. PCB and substrate suppliers in Thailand and Malaysia also benefit from packaging demand expansion. Long term, supply chain regionalization will bring sustained investment opportunities to SE Asia, but short-term geopolitical risks to the supply chain require attention.
RHB Research believes SE Asia semiconductor stocks are reasonably valued, with a 2026 forecast P/E of about 18x, below the global average of 22x, offering a margin of safety. With the traditional peak season in Q3, chip prices may rise slightly, further boosting industry profitability.
Outlook: growth may slow in 2027, but SE Asia remains a highlight
Looking ahead to 2027, SIA forecasts global semiconductor sales growth will moderate to about 10%, mainly due to base effects and overcapacity in some areas. However, the SE Asia market is expected to maintain over 15% growth, supported by manufacturing relocation and localization policies. Third-generation semiconductors like SiC and GaN, driven by new energy and 5G applications, will form new growth poles. Thailand and Malaysia have planned multiple SiC wafer fabs, targeting volume supply by 2028.
Overall, the global semiconductor industry is shifting from broad recovery to structural divergence. SE Asia has become a key theme in this semiconductor investment cycle due to cost and policy advantages. For investors, focusing on SE Asian companies in packaging/test, automotive chips, and AI chip support may capture the most certain growth opportunities in the coming years.
