Over the past few years, numerous PCB manufacturers have embarked on their investment spree in Thailand, marking a substantial shift in the global supply chain, with a scale rarely witnessed in decades. DIGITIMES Research noted that PCB manufacturers strategically align themselves with their customers to bolster supply chain resilience and respond to rising demands for automotive electronics.
DIGITIMES Research analyst Molf Lai observed that the recent surge of investments in PCB manufacturing mainly occurred after 2021, amid initiatives by companies based in Japan, Taiwan, and China to establish a strong presence in the Thai market. For example, Japan-based companies like CMK and Fujikura Electronics, China-based companies like Kimboard, and Taiwan-based companies like Apex International have all made their mark in Thailand. Local players in Thailand, such as KCE Electronics, also emerged as a significant PCB supplier for major automakers.
These investments in PCB industry in Thailand centered around Bangkok and the Eastern Economic Corridor (EEC), spanning from Phra Nakhon Si Ayutthaya in the north, Rayong in the south, Samut Sakhon in the west, and Chachoengsao in the east, covering an area of about 250 square kilometers, gathers nearly 60-80% of manufacturers in automotive, optical and hard disk, electronics, TV and audio devices industry. PCB manufacturers opted to set up facilities in these areas to shorten their distance from their customers to respond to market demands in various industries swiftly, said Lai.
Despite rising investments in the PCB industry in Thailand, it has to be noted that Thailand's PCB ecosystem still lags behind East Asian powerhouses, such as China, as evident in Thailand's rising trade deficit of PCB products, underscoring the fact that the local production cannot fully meet the increasing demands of downstream industries.
Observations from DIGITIMES Research indicate that various industry players have expressed optimism regarding the automotive industry demand in Thailand when determining their investment plans. Apart from PCB manufacturers, upstream copper-clad laminate (CCL) suppliers have joined this wave of investments.
Besides, Lai said that against the backdrop of the China-plus-one strategy, the increased investment focus of the PCB industry in Thailand not only signifies supply chains seeking risk diversification but also represents the expansion of Thailand's electronic manufacturing capabilities in upstream components and raw materials production, thus further enhancing the ecosystem of the electronics industry.
According to Lai, industry players' investment amounts vary in scale, ranging from less than US$6 million to over US$200 million, with large projects including an investment of JPY 25 billion (US$170 million ) by Japan-based CMK and NTD250 million (US$7.98 million) by Taiwan-based Zhen Ding. The mass production schedules are estimated to fall between 2024 and 2025. For example, Zhen Ding's facility will commence mass production in the first quarter of 2025, and CMK's manufacturing production expansion is expected to be in August 2024. These investments are anticipated to meet automotive, communication, computer, and server demands.
Lai emphasized that among various industries, automotive electronics could serve as the key catalyst propelling the growth of the PCB industry in Thailand, thereby playing a pivotal role in reestablishing Thailand's position within the global supply chain.
Number of factories by province in Bangkok and EEC regions
Two- and three-wheelers
Optical disc and other storage media
TV, recorder assembly
Phra Nakhon Si Ayutthaya
Changwat Samut Sakhon
Source: Ministry of Industry of Thailand, compiled by DIGITIMES Research, October 2023
About the analyst
Molf Lai received her master's degree from the Graduate School of Political Science and Economics at Meiji University, Japan. She worked as an analyst at DIGITIMES Research, focusing on analyzing the Japanese electronics and electrical industry supply chain and the PCB and IC substrate industry in East and Southeast Asia.
Credit: DIGITIMES Research