ADB is Bringing Resources to Semiconductor Industry Development—Part 1

The Asian Development Bank (ADB) increasingly defines the semiconductor as a critical pillar for regional economic growth and supply chain resilience. Rather than emphasizing only direct manufacturing, its initiatives often target the enabling environment—specifically workforce development, policy reform, and infrastructure.

Three strategic focus areas dominate the attention of ADB’s executives at their Manila headquarters:

• Human Capital Development: The ADB knows that semiconductor manufacturing requires highly skilled labor. It therefore emphasizes increased spending on R&D and human capital to keep Asia competitive in the AI era.
• Policy Advisory: Through research reports like the Asian Development Outlook, the ADB advises governments on devising policies to attract foreign direct investment into the semiconductor sector.
• Supply Chain Resilience: ADB analyses focus on reducing reliance on a few large trading partners by diversifying supply chains and managing risks associated with disruptions, especially since 75% of global chip capacity is currently concentrated in East Asia.

Founded in 1966, Asian Development Bank (ADB) is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Image from Adobe Stock (licensed).

In Part 1 of this two-part article series, we’ll look at some country-specific ADB projects and initiatives. In Part 2 we’ll focus on ASEAN and CAREC Regional Platforms, looking at ADB's overarching methodology for integrating semiconductor value chains across multiple borders through regional cooperation platforms.

Thailand's NXPO and the ADB: Scaling High-Skilled Semiconductor Talent

In early 2025, Thailand's Office of National Higher Education Science Research and Innovation Policy Council (NXPO) collaborated with the Asian Development Bank (ADB) to scale up high-skilled workforce development specifically for the semiconductor and advanced electronics sectors. The partnership, announced in January 2025 and formally advanced at a bilateral meeting in February 2026, is one of the most concrete examples of how a multilateral development bank and a national science-policy agency can jointly address a structural talent gap that threatens to constrain an entire industrial strategy.

Thailand's ambition in semiconductors is substantial but candidly difficult. The country has historically been a major site for back-end semiconductor assembly and testing—the final stages of a chip's journey from wafer to packaged product—but has sought to move upstream toward higher-value activities such as chip design, advanced packaging, and selective front-end wafer fabrication.

That ambition requires engineers and technicians who do not yet exist in the numbers needed. An independent April 2025 analysis cited by SEMI estimated that Thailand may need to develop as many as 86,000 engineers over the medium term to realize its semiconductor strategy—a number that can only be reached through a systematic, multi-year national effort.

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"The semiconductor sector is particularly intriguing as it can drive Thailand's adaptation to change. The curriculum of this workforce development project allows for 100% co-creation in designing it."—Dr. Kitipong Promwong, former NXPO President

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New NXPO Policy Instruments

NXPO responded by assembling an unusually comprehensive architecture of policy instruments. Its five-year workforce development plan—covering the period through 2029—begins with detailed demand-side intelligence.

Thailand's Office of National Higher Education Science Research and Innovation Policy Council (NXPO) worked with the ADB to scale up high-skilled workforce development specifically for the semiconductor and advanced electronics sectors. Image used courtesy of nxpo.or.th/th/en/

The Thailand Talent Landscape 2025–2029, launched in June 2025 in collaboration with Iris Consulting, surveyed workforce requirements across ten targeted industries and identified Smart Electronics and Robotics as requiring over 226,000 additional workers within five years. That granular data allows universities, training centers, and private-sector partners to design programs that match specific job profiles rather than producing graduates with generic engineering degrees that may or may not align with industry needs.

On the supply side, NXPO has moved with notable speed. Four National Semiconductor Training Centres (NSTCs) have been established with targets to upskill and reskill over 1,500 personnel in the near term, with a 2025 target of at least 1,200 newly trained workers.

A Higher Education Sandbox initiative—which fast-tracks the approval of new university programs developed in direct collaboration with industry—has already enrolled more than 150 students in its first cohort across five universities, structured in modular certification blocks so that students can enter the workforce at each stage rather than waiting four years for a conventional degree. The STEMPlus platform, a digital matching and credentialing system, has helped create over 13,000 new STEM positions across 200 companies and facilitated skills development programs for more than 450,000 individuals.

The ADB's role in this ecosystem is to function as a convening partner, a source of technical expertise, and a financier of the policy architecture that underpins it. The Bank brings to the collaboration its longstanding engagement with NXPO, its familiarity with comparable workforce transitions across the Asia-Pacific region, and its ability to benchmark Thailand's approach against international best practice.

Focus on Semiconductors, AI, and More

At the February 2026 bilateral meeting, ADB Senior Director Ayako Inagaki explicitly underscored that semiconductors, artificial intelligence, quantum technology, cybersecurity, and clean energy are the technology verticals where the Bank expects the greatest employment creation across the region—giving the Thailand partnership a strategic logic that extends well beyond a single country.

The partnership also extends to Thailand's Board of Investment (BOI), aligning workforce planning directly with investment attraction. Foreign semiconductor companies choosing Thailand as a manufacturing or R&D base need assurance that local talent will be available; conversely, the most effective training programs are those co-designed with the companies that will eventually hire their graduates. This three-way integration of NXPO, ADB, and BOI is designed to ensure that curricula are not lagging indicators of industry need but are continuously updated as the sector evolves.

Companies participating in the brainstorming and co-design process have included Analog Devices, NXP Semiconductors, Infineon Technologies, Silicon Craft Technology, and Stars Microelectronics—a cross-section of the global semiconductor industry that gives the training centers credibility and ensures graduate employability.

University Engagement

Universities engaged in the program span Thailand's leading institutions of science and technology, with international academic partnerships providing curriculum benchmarking through Arizona State University and Imperial College London. A train-the-trainer program ensures that faculty development keeps pace with technological change, addressing one of the most persistent bottlenecks in technical education: the lag between what industry needs and what academic departments can teach.

Scholarship programs provide financial support to students who might otherwise be deterred by the opportunity cost of studying advanced semiconductor engineering rather than entering the workforce immediately.

The broader significance of the NXPO-ADB collaboration lies in its model. Thailand is not the only ADB developing member country with semiconductor ambitions, and the architecture NXPO has built—demand intelligence, modular curricula, industry co-design, and credentialing platforms—offers a template that the Bank can encourage other DMCs to adapt.

As ADB's own research notes, Asia's economies are entering an inflection point where the quality and composition of their workforces will determine whether they can capture the value being generated by the global semiconductor and digital technology boom, or remain dependent on lower-value stages of production.

ADB Loans and De-Risking Solutions for Semiconductor Financing

As part of the Bank's new approach to supporting critical minerals-to-manufacturing (CMM) value chains, the ADB provides loans and de-risking solutions to help private companies in Developing Member Countries (DMCs) secure financing for digital technologies including semiconductors.

This strand of ADB strategy represents a fundamental evolution in how the Bank positions itself—not merely as a financier of public infrastructure, but as a catalytic partner for private-sector investment in the technology industries that will define Asia's economic trajectory through the middle of the twenty-first century.

The CMM framework, formalized as a strategic program in 2025 alongside ADB's record $29.3 billion in total commitments for the year, was born from a recognition that the clean energy transition and the digital technology revolution share a common dependency: both require reliable access to a set of critical minerals and the industrial capacity to convert those minerals into finished components. Semiconductors sit at the intersection of these two demands.

They are essential to the artificial intelligence systems driving productivity across every industry; they are central to the power electronics that manage energy storage and conversion in renewable installations; and they are present in virtually every advanced manufactured product, from electric vehicles to medical imaging equipment to telecommunications infrastructure.

It’s telling that the ADB had this to say about its CMM approach: "Our goal is to catalyze private capital and ensure every project upholds ESG excellence and promotes local value addition."

The problem that ADB's CMM framework is designed to address is straightforward: private capital, left to its own devices, tends to concentrate financing in mature, low-risk assets in stable jurisdictions. Building semiconductor-related manufacturing capacity in a developing country does not fit that profile.

The capital requirements are large, the lead times from investment to production are long, the technology is complex and subject to rapid change, and the geopolitical environment surrounding semiconductor supply chains has become increasingly volatile since the US-China technology trade tensions of the late 2010s accelerated into an outright contest for supply chain control. For a private company or commercial bank contemplating a loan or equity investment in semiconductor capacity in, say, Indonesia, Malaysia, or Vietnam, these risks can be prohibitive.

Changing the Risk Calculus

ADB's de-risking toolkit is designed to change that calculus. Loans from ADB's ordinary capital resources carry the Bank's preferred creditor status, meaning they are prioritized even in situations of sovereign financial stress—a meaningful advantage in markets where country risk is a significant deterrent to private lending. Guarantees and first-loss provisions can be structured so that ADB absorbs the initial tranche of any losses on a project, converting what would be a highly uncertain return profile into something commercially financeable.

Syndication mechanisms allow ADB to bring in commercial banks and institutional investors alongside its own balance sheet, multiplying the capital available for any given project while simultaneously offering those co-financiers the protection of ADB's due diligence processes and governance standards.

Transaction advisory services are an equally important but less visible part of the toolkit. Many DMC governments and private companies have the technical competence to operate in the semiconductor value chain but lack experience in structuring complex financial transactions, navigating environmental and social compliance frameworks, or presenting their projects in the format that international institutional investors require.

ADB's transaction advisors bridge that gap, effectively functioning as investment bankers whose mandate is development rather than fee maximization. The Bank reported that in 2024 alone, two such advisory engagements reached commercial closure, mobilizing over $2 billion in capital commitments from private sources—illustrating the leverage that well-executed transaction advisory can achieve.

High Cost of Semiconductor Production

The semiconductor-specific application of this framework is particularly important because of the nature of the industry's capital requirements. A world-class semiconductor fabrication plant—even for mature-node chips used in power electronics or automotive applications rather than the cutting-edge logic chips produced by TSMC or Samsung—requires billions of dollars in equipment and infrastructure.

A world-class semiconductor fab requires billions of dollars in equipment and infrastructure. Image from Adobe Stock (licensed).

No DMC government can finance such investments from public budgets alone, and few private companies have the risk appetite to proceed without some form of public de-risking. ADB's role is to occupy the space between: providing the risk-sharing structures that make private investment viable while maintaining the governance and ESG standards that prevent the extraction of public benefits by private actors.

The Bank is also attentive to the environmental and social dimensions of semiconductor-related supply chains, which begin with mining the materials—silicon, rare earths, germanium, gallium—that feed into chip manufacturing. ADB's framework requires that all supported projects meet the Bank's Safeguard Policy standards, covering environmental impact, community engagement, labor rights, and anti-corruption measures. It has engaged with the Extractive Industries

Transparency Initiative (EITI) to build data systems and traceability mechanisms into mineral supply chains, and is promoting circular economy approaches—recycling and reuse of semiconductor materials and electronic waste—as a way to reduce the environmental footprint of the industry over time.

ADB's CMM Framework at a glance: key figures

A multi-donor financing facility is under development to provide grant funding for analytical and diagnostic work in DMCs, helping governments understand their position in semiconductor value chains and identify where ADB-supported investment would have the greatest impact.

A mid-term review is planned for 2027–2028 to assess whether the framework is ready to expand into additional phases, including support for junior mining companies at the exploration stage.

In Part 2, we’ll look at ASEAN and CAREC Regional Platforms, examining ADB's overarching methodology for integrating semiconductor value chains across multiple borders through regional cooperation platforms.