From Production Platforms to the Techno-Electric Stack

Southeast Asian countries should rethink industrial policy in a world where large economies are building so-called Techno-Electric Stacks (TE Stacks). These new production ecosystems enable the integration of manufacturing, robotics, and battery technologies through semiconductors, software, and AI.

The TE Stack is an industrial structure distinct from industry clusters (geographically integrated production systems), global value chains (a sequence of decentralised activities across regions and countries) and production platforms (a modular and distributed network of factories and processes). Countries with these stacks have companies that can expand manufacturing across multiple sectors. In China, BYD produces electric vehicle (EV) batteries and vehicles with infotainment, driver-assistance, and hands-free systems; Xiaomi produces smartphones, robots, and cars. In the US, Tesla manufactures cars and robots, and Nvidia produces chips. Alphabet, Apple, Meta, and Microsoft lead in AI and applications.

The TE Stack is a description of a new type of industrial ecosystem with different terms for the same phenomenon. Kyle Chan describes China as a ‘tech industrial ecosystem’ in which companies collaborate to produce EV batteries, drones, autonomous vehicles, electric vehicles, AI applications, smartphones, semiconductors, and global navigation systems. Noah Smith calls it the ‘Electric Tech Stack’ and suggests that every country needs to master it. Patrick McCromick names it the ‘Electric Slide’ as a metaphor for the cost curve of key stack technologies such as batteries, magnets, motors and power electronics. These technologies get cheaper and better together, enabling the widespread electrification of transport, services, and industries.

The TE Stack comprises core components that are increasingly shared across seemingly unrelated industries: lithium-ion batteries, rare-earth electric motors, semiconductors, microcontrollers and digital signal processors, and sensors and software. The TE Stack is characterised by industrial co-evolution, where progress in one sector, such as smartphones, creates a compounding advantage for another, such as electric vehicles (EVs) or drones. This is due to the sharing of underlying components. Mastery of the TE Stack allows companies to rapidly pivot from consumer electronics to highly complex manufacturing.

As the global industrial landscape requires a fundamental shift, Southeast Asian economies play a significant role, collectively expanding manufacturing while advancing the green transition.

The US and China dominate large and different TE Stacks. The American government is pursuing reindustrialisation to strengthen its own stacks, but this has already extended across Taiwan and economies such as Japan, Singapore, South Korea, and Western Europe. China exerts dominance with its own technology stacks across broad industrial domains within its territory.

Both Washington and Beijing now think in terms of stacks. For the US, controlling and exporting a competitive technology stack — especially in semiconductors, cloud and AI infrastructure, data and applications — has become central to economic power. US strategy is shifting from leading discrete technologies to promoting a full TE Stack to lock in market share and shape global norms. The stack perspective enables countries to work around chokepoints and dependencies, enabling more targeted industrial policies, export controls, and alliances around critical layers such as advanced chips and cloud services.

​Against this backdrop, the key question for Southeast Asia is not whether to choose between American and Chinese technologies and standards, but how to hedge among competitors, and to shape and partially own a piece of the stack that preserves strategic autonomy while maximising development gains. The region’s booming digital economy, already valued in the hundreds of billions of dollars and projected to exceed USD1 trillion by 2030, depends on robust connectivity, data centres, AI‑ready computing, and interoperable platforms. ASEAN has not yet developed a coherent regional stack. Such a stack would enable ASEAN economies to integrate global and local cloud providers, platforms, and standards. This would reduce excessive dependence on any single external actor while keeping the region attractive for investment and innovation.

ASEAN’s emerging policy frameworks already point in this direction. The ASEAN Digital Masterplan and the prospective Digital Economy Framework Agreement are de facto pillars of the region’s future electric stack. The ASEAN Framework for Integrated Semiconductor Strategy (AFISS) and the Geoeconomics Task Force can also support policy design. If these choices are made in a fragmented, bilateral way, Southeast Asian economies risk locking themselves into incompatible systems and enduring dependencies. If they are made with a regional lens, the same investments can underpin a more integrated and resilient ASEAN digital space.

The return of industrial policy in the age of techno-electric stacks does not close off options for Southeast Asia; it redefines them. For policy, the interaction implies that upgrading in the techno-electric era is not just about subsidising EV assembly. It is about the coordinated development of various elements — upstream materials, component industries, power‑electronics, motor supply bases, charging and grid infrastructure, skills, and standards — so that the whole system can move along the electric stack learning curves. The challenge is to move from a narrow focus on attracting individual investments or platforms to a broader strategy of co‑designing TE Stacks on which they will run.

The views expressed in this article are those of the author and do not necessarily reflect the views of UNIDO.

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