New US tariffs on Malaysian solar components are accelerating regional collaboration across Southeast Asia, with Vietnam, Thailand, and India forming specialized hubs to counterbalance China’s dominance in renewable tech.
The US Commerce Department’s 50-250% tariffs imposed on 18 June 2024 have forced major manufacturers like Hanwha Q Cells to accelerate production shifts to Vietnam, unveiling new regional dynamics in clean tech.
Tariff Fallout Drives Manufacturing Exodus
The US tariffs targeting Chinese solar components routed through Malaysia, finalized on 18 June 2024, have immediately impacted manufacturers. Hanwha Q Cells announced on 19 June it will transfer 30% of its Malaysian photovoltaic cell production to Vietnam by September 2024, while Jinko Solar began commissioning a 5GW module facility in Thailand this week. ‘This isn’t mere relocation—it’s supply chain reinvention,’ Wood Mackenzie analyst Ravi Menon told Reuters, noting Southeast Asia’s solar installations grew 138% year-over-year in Q1 2024.
The Silicon Ring Strategy Emerges
Vietnam’s 50% corporate tax cut for solar R&D, enacted on 19 June, complements Thailand’s manufacturing scale and India’s $7.8B production-linked incentive (PLI) scheme for polysilicon. ASEAN Centre for Energy data shows Malaysia still leads regional exports, but Vietnam’s tech patents filed in H1 2024 surged 22%. ‘We’re seeing specialization—Vietnam for R&D, Thailand for modules, India for materials,’ said Longi’s Southeast Asia VP Chen Wei during a 20 June industry webinar.
Historical Parallels and Future Projections
The current shift echoes China’s 2010s mobile payment boom, which established infrastructure for today’s AI-driven markets. Similarly, the 2022 US anti-circumvention investigation laid groundwork for these tariffs. Analysts warn protectionism might backfire: the EU’s Carbon Border Adjustment Mechanism (CBAM) has already pushed 63% of ASEAN manufacturers to adopt low-carbon silicon since January 2024. With India targeting 30GW annual polysilicon capacity by 2026, the Silicon Ring could capture 35% of global solar manufacturing by 2028, per Wood Mackenzie projections.
