NewsHK
The semiconductor cycle has become a lens through which development economists are reading Southeast Asia's two most closely watched emerging markets.
Vietnam and the Philippines are being identified as economies where growth in the chip sector is a critical factor in escaping the middle-income trap, with semiconductor expansion expected to carry each nation toward high-income status.
The middle-income trap has a well-understood shape. An economy grows quickly in its early stages, often on the back of low-cost manufacturing.
At some point those cost advantages erode, wages rise, neighboring economies undercut on price, and the country finds itself between the labor-intensive base it is leaving and the high-value industries it has not yet built.
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