Thailand is vying to become the new PCB cluster within ASEAN

The PCB industry is vital for the modern economy as it serves as the basic and core component of all electronic devices, including semiconductors. PCBs connect the functions of various components, power grids, and internal circuits of almost all types of electronic devices, especially high-tech products such as electric vehicles, automated robotics, artificial intelligence technology, and 5G technology, which require more complex PCBs than general electronic products.

Overview of the world’s Printed Circuit Board PCB industry

In the past few years, the global PCB industry has faced challenges due to weaker global demand, semiconductor manufacturing supply chain disruptions, and lockdown measures during the COVID-19 pandemic. These factors have led to excess inventory in the system and impacted freight shipments.

However, SCB EIC predicts that the industry will recover this year, driven by increasing demand for PCB components in innovative product segments such as electric vehicle production and AI server supply chains. According to the Taiwan Circuit Board Association, the global PCB industry is expected to grow by 6.3% YOY this year, following a 15.6% contraction last year. It is projected to achieve an average annual growth of 4-5% over the next 3-5 years.

New PCB Cluster in ASEAN

China is currently the world’s largest PCB manufacturer, accounting for over 50% of global production. Taiwan and South Korea follow as the next largest producers. There is a noticeable decline in PCB production in China, attributed to the geopolitical conflict with the United States. This conflict has led to the relocation of production bases out of China to mitigate supply chain risks, resulting in the emergence of new PCB clusters in ASEAN and Thailand.

This is reflected in the value of foreign investment in the PCB industry reaching more than 100 billion baht. Especially investment from Chinese, Taiwanese and Japanese companies. The main factors driving FDI are Thailand’s advantages from having a strong electronics industry infrastructure and government policies that are conducive to investment in the PCB manufacturing supply chain, such as the exemption from import duties on machinery and raw materials used for export, and corporate income tax exemption for up to 8 years.

This is in line with the trend of investment in electronic components in Thailand, especially in the PCB industry, which is in the same direction as the data of the Thai Printed Circuit Board Association, which states that the increasing trend of PCB investment in Thailand will result in Thailand’s share of the global market increasing from the current 4% to 10% in the next 3-5 years.

Thailand’s Transition to a New PCB Cluster in ASEAN

The trend of foreign investment pouring into Thailand is evident. The main challenge lies in accelerating the development of personnel and infrastructure to move towards establishing a new PCB cluster in ASEAN and a more sophisticated PCB production base. This involves ensuring reliable electricity supply, implementing a comprehensive 5G network, and promoting the use of renewable energy.

Additionally, businesses in the PCB manufacturing supply chain should expedite the development and improvement of production processes in line with ESG concepts to enhance the industry’s environmental status. Moreover, investment in research and development is crucial for producing higher-value PCBs. Developing labor skills and human potential to support the changes in modern technology and the transition to the digital era is also essential. This includes upskilling and reskilling to create more skilled personnel in smart electronics, ultimately leading to sustainability.

SCB EIC brief / ปักหมุดไทยชิงตำแหน่งคลัสเตอร์ PCB แห่งใหม่ในอาเซียน | SCBEIC