Taiwan-based PCB manufacturers are facing challenges as they push forward with relocating production to Southeast Asia, particularly Thailand, such as limited land, water, and electrical supplies, according to industry sources.
Unlike previous waves that were driven by costs, production relocation over the last two years has been driven by geopolitics, trade competition, and concerns over broken supply chains, according to the Taiwan Printed Circuit Association (TPCA).
Taiwan-based PCB makers previously relocated from Taoyuan, Taiwan, to Kunshan and then Hebei, China. This time, PCB makers are eyeing the area around Bangkok, Thailand. The main purpose of clustering in one area is to reduce transaction costs and increase production efficiency.
However, resource crowding becomes a problem when an industry moves at the same time. The supply-demand balance also faces price competition whenever production capacity is released. Industry players noted that these are issues that the PCB industry will have to deal with.
Moving a PCB factory once it has been established is difficult and requires support from the supply chain, sources said. As a result, more than 60% of Taiwan-based PCB makers' production capacity is in China, with the remaining 37% in Taiwan.
Thailand has long had the highest PCB output of Southeast Asia. The country boasts a certain foundation for PCB industry chain development, a friendly population, an open economic trade environment, and a high degree of internationalization, becoming the top pick for the overseas layout of Taiwanese businesses, according to the TPCA.
Since 2021, Taiwanese PCB makers including Unimicron Technology, Compeq Manufacturing, Wus Printed Circuit, Dynamic Electronics, and Complex Microinterconnection (CMI) have announced plans to invest in Thailand. Taiwan-based raw materials producers Taiflex Scientific, Taiwan Union Technology (TUC), and ITEQ are all concentrated around Bangkok.
Compeq announced in late April that it has acquired the land needed to build a factory in Thailand for THB977 million (US$28.68 million). The 180,000 square meters of land is located in the Asia Industrial Estate in the Bang Bo District of Samut Prakan Province.
Establishing the factory in Thailand is a major focus for Compeq in 2023-2024. They are aiming for production to begin in the fourth quarter of 2024.
Sources noted that a number of Chinese companies have also announced Thailand investment plans, including Aoshikang Technology (ASK), China Eagle Electronic Technology (CEE), Jove Enterprise, and Fuji Electronics Technology.