Why Thailand for smart electronic business?

Electrical and Electronics Industry (E&E) In the face of a worldwide pandemic, Thailand’s export of electrical and electronic products is expected to exceed USD 34 billion in 2020. Hard disk drives have continued to drive forward export in this area, accounting for around a quarter of total E&E export in 2020. Apart from HDD, integrated circuits accounted for 19% or roughly USD 6.7 billion, followed by semiconductor, transistor, and diode at approximately 7% or approximately USD 2.4 billion. Looking at domestic manufacturing, Thailand is a large producer of various regularly used household appliances, such as printers, air conditioners, compressors, and washers, in addition to the goods mentioned above. They are manufactured by a network of approximately 2,623 firms of varied sizes. This industry employs 750,000 people in total, making it one of Thailand’s most important industries.

The success of the E&E sector is made possible by an upstream industrial supply chain that is full and resilient. The semiconductor business in Thailand, in particular, is widely renowned for its providing of assembly, packaging, and testing, allowing it to provide the E&E industry at a cheap rate. Furthermore, the presence of numerous significant downstream industries contributes to the appeal of Thailand’s E&E industry. For example, as Thailand’s automobile industry shifts toward contemporary electric vehicles, more electronic parts and equipment will undoubtedly be required. Thailand is the world’s 11th largest vehicle maker, thus demand from this industry will be substantial. A long history of industrial development in the electronic business: thanks to the Thai government’s strong and consistent support dating back to the 1970s, the E&E value chain is consequently active, accounting for more than 10.4 percent of Thailand’s GDP in 2020. Furthermore, a whole ecosystem of supporting sectors, such as iron and steel, chemicals, plastics, or glass manufacture, adds to the ease of procurement for parts and materials. According to a JETRO (2019) study of Japanese firms, 45 percent of raw parts/materials for electronic business production are available locally in Thailand.

The Thai semiconductor industry has become the key sub-sector impacting downstream production as a major manufacturing base in the E&E sector’s worldwide supply chain. In 2020, the semiconductor sector will account for around 7% of total output destined for Thai electronics export markets. However, the majority of semiconductors are supplied by local electronic business. They are regarded as an important component in the fabrication of Integrated Circuits (ICs), which are frequently used in electronics, computers, and mobile phones. As a result, the semiconductor sector is strongly linked to worldwide demand for technological products. Work from home rules increased the demand for electronics equipment, causing the distribution of semiconductors to increase by up to 6%. The continuing coronavirus epidemic is also projected to boost demand for Thai semiconductors. Stars Microelectronics Public, Ecotech-Solar, INDEFF, and Siam IKK are some of Thailand’s leading semiconductor and semiconductor equipment manufacturers. Due to the E&E industry’s experience with increased demand, the Thailand Board of Investment authorized an improved incentive for the semiconductor sector in June 2021 in order to attract more investors, boost production, and maintain a stable supply chain.

The Printed Circuit Board (PCB) is an important fundamental component of electronic circuits that serves as a location to house parts as well as route the electrical signals of the numerous electronic devices on the circuit to keep devices linked and functional. In terms of PCB market value, the worldwide PCB industry is estimated to be worth 76.9 billion USD by 2024. The Thailand Board of Investment accepts 15 PCB projects with a total investment value of 244.01 USD in 2020. The projects include the following items: flexible PC or multi-layer PCB or components, printed circuit board assembly (PCBA), and other PCB that have been identified as Thailand’s main PCB products. Fischer, Kyoden Group, Circuit Industries, She Feng Enterprise (Thailand) Co., Ltd., Autech Thailand, Draco PCB Public Company Limited, and MMC Global are examples of prominent players in Thailand’s PCB sector. More, however, is constantly required to plan for future expansion.

Thailand’s E&E supply chain has a lengthy history. Since the 1970s, the Thai government has consistently backed the industry with different sorts of incentives and facilitative measures. As a result, the business has grown to become one of Southeast Asia’s most vibrant electronic business. A strong network of supporting sectors, such as metal, plastic, and rubber manufacturing, offers easy and cost-effective procurement, complementing Thailand’s position as a top investment destination for the smart E&E industry.

The ASEAN economy generates over USD 3 trillion in production every year, making it one of the world’s largest markets. Growing customer demand will drive the development of new goods not only in the E&E category, but also in other sectors/items that are becoming digitally changed, such as the automotive industry, where digital components are replacing analog equipment. Because Thailand is also the world’s 11th largest automobile producer, E&E makers will consider Thailand not just as a manufacturing base, but also as a prospective market.