Unlocking IVD Manufacturing Opportunities in Southeast Asia : A Strategic Overview 

Southeast Asia (SEA) is rapidly evolving as a key destination for in vitro diagnostics (IVD) manufacturing. Driven by population growth, expanding healthcare access, supportive government policies, and increasing demand for localized supply chains, the region presents unique investment opportunities for diagnostic innovators and manufacturers.

In this article, we explore the IVD manufacturing landscape across key SEA countries, highlighting current activities, market sizes, growth trends, and favorable policies—complemented by a table that summarizes the number of local manufacturers and the diagnostic categories they serve.

Indonesia: A Push for Local Manufacturing Through TKDN

Indonesia, with a population of over 270 million, presents one of the largest healthcare markets in the region. The IVD market is projected to grow at a CAGR of 8–10% over the next five years, driven by increasing chronic disease prevalence, improving diagnostic infrastructure, and national health insurance expansion.

A significant opportunity lies in Indonesia’s Local Content Requirement (TKDN) policy. To gain favourable positioning in public procurement and product registration, IVD manufacturers are encouraged—if not mandated—to localize part of their manufacturing process. The Ministry of Health has increasingly linked product reimbursement eligibility to TKDN compliance, pushing international players to either partner with local firms or set up joint ventures.

Opportunity: Foreign manufacturers can partner with local assemblers or invest in technology transfer initiatives to align with TKDN, gaining faster market access and regulatory approval.

Thailand: Southeast Asia’s Medtech Manufacturing Hub

Thailand is well-known for its medical device manufacturing ecosystem, supported by the government’s Thailand 4.0 initiative, which promotes innovation in healthcare and biotechnology.

The IVD sector is estimated to reach over USD 1 billion by 2027, with a CAGR of approximately 7%. The Board of Investment (BOI) offers generous tax incentives to IVD manufacturers, including:

• Up to 8 years of corporate income tax exemption.

• Import duty exemptions on machinery and raw materials.

• 100% foreign ownership and land ownership rights.

Opportunity: Companies can leverage Thailand’s BOI incentives and mature supply chain to set up regional IVD manufacturing centres that serve both domestic and export markets.

Vietnam: A Rising Contender with Pro-Business Policies

Vietnam’s IVD market is growing at an impressive pace—estimated at over 10% CAGR—driven by demographic shifts and government healthcare reforms. Although still in its developmental phase, the government is actively courting foreign investment in medical technologies through:

• Tax holidays (up to 4 years income tax exemption, and 50% reduction for the next 9 years).

• Simplified customs procedures under the EVFTA and CPTPP agreements.

Opportunity: Early movers can take advantage of Vietnam’s cost-effective labour, strategic location, and strong policy support to establish scalable IVD production.

Philippines: Healthcare Digitization Drives Diagnostic Demand

The Philippines’ IVD market, valued at approximately USD 300–400 million, is on a steady upward trajectory due to an expanding middle class and rising awareness of preventive healthcare.

While not traditionally a manufacturing hub, the country is introducing fiscal incentives through its CREATE Act, offering:

• 4 to 7 years income tax holidays.

• Enhanced deductions for R&D, training, and export activities.

• Preferential treatment for enterprises in healthcare innovation zones.

Opportunity: There’s potential for niche IVD players focusing on telehealth-compatible diagnostics or point-of-care solutions targeting remote areas.

Malaysia: A Regional Distribution and Regulatory Hub

Malaysia offers a unique blend of business-friendly policies and infrastructure, making it ideal for regional distribution and light manufacturing. The IVD market is growing at around 6–8% CAGR, bolstered by private healthcare expansion.

The Malaysian Investment Development Authority (MIDA) supports IVD firms with:

• Pioneer status (5–10 years tax exemption).

• Investment tax allowance.

• Facilitated approvals for product registration and clinical evaluation.

Opportunity: Use Malaysia as a base for regional quality control, packaging, and ASEAN-wide distribution.

Singapore: Innovation and Contract Manufacturing

Singapore doesn’t offer the lowest costs, but its regulatory rigor and R&D capacity make it ideal for high-end IVD production and contract manufacturing. It is also home to many APAC headquarters of multinational diagnostic companies.

Incentives include:

• Up to 400% tax deduction on R&D under the RIE2025 plan.

• Government co-funding for pilot-scale manufacturing.

• Advanced infrastructure in biomedical science parks.

Opportunity: Ideal for IVD companies seeking to develop and validate advanced diagnostics before regional scale-up.

Conclusion: SEA as a Strategic Pillar in Global IVD Expansion

The IVD manufacturing landscape in Southeast Asia is evolving rapidly, offering a range of opportunities from low-cost assembly in Vietnam to innovation-driven manufacturing in Singapore. Navigating this landscape requires a localized strategy—balancing incentives, compliance (like TKDN), and regional dynamics.

For global IVD companies and investors, the region presents a timely and compelling proposition: diversify supply chains, gain faster market entry, and tap into one of the most dynamic diagnostic markets globally.