Artificial intelligence (AI) and edge computing are a powerful combination. The edge brings AI processing closer to where relevant data comes from, resulting in lower latency and improved performance. Likewise, AI increases Internet of Things (IoT) device functionality, allowing such systems to get more from their data.

This potential is hard to ignore in any context, but it’s particularly promising for manufacturing in the Association of Southeast Asian Nations (ASEAN). These two technologies are already driving factory growth across Thailand and Vietnam, offering a glimpse at a remarkable future for the rest of the region in these five ways.

1. Drawing Outside Investment

The most outwardly evident way edge AI accelerates Thai and Vietnamese manufacturing is through international investment. Global tech giants have recognized these nations’ latent potential for edge AI applications, leading them to pour into local economies.

Google announced a $1 billion investment in Thai data center infrastructure in 2024. Microsoft unveiled similar plans for the country earlier the same year. ASEAN markets like Thailand are ripe for digital transformation, and as companies like Microsoft and Google act on that readiness, they inject funding into local Industry 4.0 initiatives.

While the edge and AI are not the only technological possibilities drawing outside investors, they are among the most prevalent. Nvidia agreed to establish an AI research center in Vietnam after announcing a $200 million AI factory in the nation in 2024. The company cited the region’s ecosystem of startups as part of the groundwork for fostering AI growth.

2. Increasing Manufacturing Competitiveness

Edge AI is also central to Southeast Asia’s factory growth because it makes the region more competitive with global production giants. China has long been the go-to location for outsourced manufacturing, but digital transformation through edge AI may turn the tide in favor of Thailand and Vietnam.

While China accounts for 30% of global production, 30.4% of Chinese direct manufacturing investment in Asia goes to ASEAN. Beyond that, many Western companies have looked to Vietnam and Thailand as alternatives to China amid rising global trade tensions. Increased agility from edge AI could encourage more such investment.

China may remain a global powerhouse in terms of labor and material costs. However, as AI and edge infrastructure grow in Thailand and Vietnam, the resulting insight and efficiency could counteract these cost concerns. The manufacturing industry in these areas would surge as a result.

3. Capitalizing on Local Talent

The human factor plays a role in this trend, too. Southeast Asia boasts a population of over 650 million people with an ever-rising middle class. Tech education is also growing rapidly in the region, making it the ideal testing ground for new technologies like edge AI.

ASEAN’s tech talent pool is rich enough that companies worldwide have turned to the region as a key source of outsourced labor. Second Talent — a single company — recently passed 10,000 hires across Asia as part of this trend, with Southeast Asian nations leading the charge. Edge AI can unlock the full potential of this abundance of local tech expertise.

A lack of knowledge or experience is a significant barrier to tech projects worldwide. Because this gap is smaller in Thailand and Vietnam, these countries can implement edge AI faster, reaping the benefits before other regions can catch up. This early lead can surge regional manufacturing output ahead of the competition.

4. Maximizing Regional Data’s Potential

Similarly, edge AI can drive Thai and Vietnamese factory growth by capitalizing on the area’s available data. As major manufacturing centers, these nations have considerable amounts of directly relevant production data. This information is necessary for effective AI applications, and the edge makes such use cases more impactful.

Edge computing can achieve latencies as low as 10 milliseconds, whereas conventional cloud connections can take 250 milliseconds. As a result, edge AI means faster processing and fewer delays, leading to a quicker return on investment for the investing companies.

While that advantage can apply anywhere, ASEAN is uniquely poised to benefit from it, given its wealth of data. A lack of real-world information stands in the way of many organizations’ AI and edge initiatives, but the rich manufacturing sectors in this area provide the needed resources. As a result, this technology could impact Southeast Asian production before other areas.

5. Lowering Supply Chain Costs

As edge AI infrastructure grows in Thailand and Vietnam, it could lower manufacturing supply chain costs across Southeast Asia. The shift could further cement ASEAN as a global production leader when that happens.

Combining the edge and AI means getting faster insights from real-time data across the supply chain. This agility would enable Vietnamese and Thai factories to foresee disruptions, price hikes and other concerns with greater accuracy and more time to spare. As a result, they could adapt earlier to avoid the bullwhip effect, stock-outs, shortages or other common supply and demand issues.

AI supply chain management has helped early adopters reduce logistics expenses by 15% and inventory levels by 35%. Other edge AI applications — such as predictive maintenance — offer additional savings potential. Jumping on these benefits could drive Thai and Vietnamese production strength even higher.

Edge AI in Southeast Asian Manufacturing Today

Many of these trends are still in their early stages. While investment in Thai and Vietnamese edge AI is rising, there is still a long way to go before it revolutionizes Southeast Asian manufacturing.

Regional IT infrastructure will likely need to accelerate before these technologies reach their full potential. Inconsistent communications protocols and growing cybersecurity concerns also stand in the way. Manufacturers must consider these risks and potential solutions before looking into edge AI applications. Any innovation must also come as part of a broader supply chain strategy instead of tech adoption for technology’s sake.

Edge AI Is Transforming Factory Operations

The road to digital maturity is long, but Thailand and Vietnam are already on the right path. Greater attention to edge AI in these nations could supercharge their factories, leading to region-wide manufacturing growth. The environment is ripe. It’s up to companies to recognize and act on the potential.

By: DocMemory
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