Thailand Aims to Boost Semiconductor Sector with Strategic Plan Amid U.S.-China Trade War
Thailand is set to unveil an initial draft of a strategic plan for its semiconductor sector within the next 90 days, as the country seeks to attract fresh investments amidst escalating trade tensions between the U.S. and China. The move comes as global supply chains shift towards Southeast Asia, with Thailand positioning itself as a key player in the semiconductor industry.
Narit Therdsteerasukdi, Secretary-General of the Thailand Board of Investment (BOI), revealed that the national semiconductor board will hire a consultancy to develop a comprehensive industry roadmap. Narit, who reports directly to the Prime Minister, is also organizing roadshows in the U.S. and Japan to promote Thailand as a prime destination for semiconductor investments.
The global semiconductor industry has faced significant disruptions in recent years due to the ongoing tech rivalry between the U.S. and China. With President Donald Trump’s recent announcement of a 10% tariff on Chinese imports, further supply chain shifts are expected, particularly as Southeast Asia emerges as a viable alternative for manufacturers.
Thailand, Southeast Asia’s second-largest economy after Indonesia, has already seen a surge in investment interest. In 2023, the value of inbound investment applications jumped 35% to a decade-high of 1.14 trillion baht ($33.5 billion). Narit expects this figure to grow further in 2024, driven by increased investments in the electronics and digital sectors.
According to a 2024 report by consulting firm A.T. Kearney, Thailand ranks second among top emerging economies for semiconductor manufacturing, trailing only India. The country aims to attract around 500 billion baht in new semiconductor investments by 2029, focusing on power electronics used in electric vehicles (EVs), data centers, and energy storage systems.
“Thailand’s strength lies in power electronics, particularly semiconductors for EVs, data centers, and energy storage systems,” Narit said. “We believe this is where we can excel.”
Thailand is already home to several global semiconductor players, including Massachusetts-based Analog Devices, Japan’s Sony and Toshiba, and German chipmaker Infineon. Taiwan’s Foxsemicon Integrated Technology has also announced new projects in the country. Additionally, investments in printed circuit board (PCB) manufacturing, a critical component for devices ranging from smartphones to EVs, have surged since 2023.
Narit attributes the growing interest in Thailand to its neutral geopolitical stance amid the U.S.-China trade war. “One of the reasons investors choose Thailand is our position as a neutral country,” he said.
However, Thailand faces stiff competition from Malaysia, which accounts for 13% of global chip testing and packaging and is targeting over $100 billion in semiconductor investments. Despite this, Thailand remains optimistic about its ability to carve out a significant share of the global semiconductor market.
As the U.S.-China trade war continues to reshape global supply chains, Thailand’s strategic push into the semiconductor sector could position it as a key hub for electronics manufacturing in Southeast Asia. With a clear roadmap and targeted investments, the country aims to capitalize on the growing demand for semiconductors and related technologies.