Thailand is actively developing a strategic plan to attract investment in its semiconductor sector, capitalizing on the shifting global landscape and ongoing trade tensions between the U.S. and China. The country aims to have an initial draft ready within the next three months.
The national semiconductor board will engage a consulting firm to create a comprehensive industry roadmap, according to Narit Therdsteerasukdi, Secretary-General of the Thailand Board of Investment (BOI). This initiative aligns with planned roadshows in the United States and Japan to promote semiconductor investment opportunities in Thailand.
The global semiconductor industry has experienced significant disruption due to the U.S.-China trade war and competition for technological dominance. Consequently, some supply chains have relocated to Southeast Asia, a trend expected to continue. Recent tariff announcements by the former U.S. President further underscore the potential for continued market volatility.
Thailand, Southeast Asia’s second-largest economy, witnessed a substantial 35% increase in inbound investment applications last year, reaching a decade-high of 1.14 trillion baht ($33.5 billion).
“I expect the value of total applications (this year) to be more than last year’s figure, driven by investment in the electronics and digital sectors,” Narit stated.
A 2024 report by Kearney positions Thailand as a leading emerging economy for semiconductor manufacturing, second only to India. The country aims to attract approximately 500 billion baht in new semiconductor investments by 2029.
Thailand is strategically focusing on the power electronics segment, particularly semiconductors used in electric vehicles, data centers, and energy storage systems. “We think that this is our strength,” Narit emphasized. This targeted approach leverages existing strengths and aligns with growing global demand in these sectors.
Prominent companies with chip-related operations in Thailand include Analog Devices, Sony, Toshiba, Infineon, and a subsidiary of Foxconn Integrated Technology. These established presences contribute to a robust ecosystem and demonstrate the attractiveness of Thailand for semiconductor investment.
Since 2023, Thailand has also seen a rapid increase in investments for printed circuit board manufacturing, a critical component in various electronic devices, from smartphones to electric vehicles. This growth further strengthens Thailand’s position in the electronics supply chain.
“The main reason is the trade war,” Narit explained. “One of the reasons that investors choose Thailand as their location is our position as a neutral country.”
However, Thailand faces competition from Malaysia, a major player in chip testing and packaging, which aims to secure over $100 billion in sector investments. Despite this competition, Thailand’s strategic focus, existing infrastructure, and neutral geopolitical stance position it as a compelling destination for semiconductor investment.
In conclusion, Thailand’s proactive approach to developing a semiconductor strategy, coupled with its focus on power electronics and its neutral position in global trade tensions, aims to attract significant investment and solidify its role as a key player in the global semiconductor industry. The coming months will be crucial as the strategic plan takes shape and the country actively courts potential investors.
