The semiconductor industry is rapidly growing in Thailand, the country could become one of the leading key players in the SEA region.
Key takeaways
- Thailand’s semiconductor market is growing fast due to a combination of different technological, geographical, and economic factors.
- The semiconductor industry will grow 13% during this year achieving a market revenue of $588 billion.
- The industry is also preparing to address challenges such as high inventories and low fab utilization rates.
The global semiconductor industry is experiencing supply and demand imbalances due to disruptions in the supply chain and increased demand from countries moving towards digital economies. Thailand has the potential to become a significant player in the semiconductor industry by attracting production facilities and investments.
According to information given by Statista, the semiconductor market in Thailand is expected to grow at an annual growth rate (CAGR 2024-2027) of 8.88%, resulting in a market volume of US$13.23bn by 2027.
Linda Tan, SEMI Southeast Asia President explained that Thailand’s chip industry has the potential for further advancement as a new global production supply chain takes shape, with several production facilities expected to relocate to Thailand.
What are some of the key factors behind the Semiconductor industry’s growth?
There are different factors behind the growth of the semiconductor industry in Thailand, some of them are:
Favourable regulations
The Thai government has provided a favorable environment for the development of this industry, by implementing incentives and friendly policies.
Strategic location
Thailand has a strategic location within the SEA region, providing access to an extensive networked infrastructure, and facilitating connections to neighboring countries and beyond.
Skilled workforce
The country has a presence of a developed workforce of engineers who are working in the development and implementation of new technologies that could benefit the development of the semiconductor industry
Investment and strategic demand
Some of the biggest tech companies in the world are choosing the country to develop their business, positioning Thailand as one of the leading tech hubs in the SEA region.
A general overview of the global semiconductor industry growth
The semiconductor industry, known for its cyclical nature, faced a downturn in 2023 with sales dropping by 9.4% to $520 billion. However, Deloitte’s 2024 outlook forecasts a robust rebound, predicting a 13% growth to $588 billion.
This recovery is anticipated to be driven by generative AI, despite potential complications from geopolitical tensions. Memory chips, which saw a significant decline in 2023, are expected to recover to 2022 levels, contributing to the overall growth.
The industry is also preparing to address challenges such as high inventories and low fab utilization rates.
The semiconductor industry in Thailand has been experiencing rapid growth in recent years. With a strong focus on developing its technological capabilities, the country has the potential to emerge as one of the leading key players in the Southeast Asia (SEA) region.
Thailand’s strategic location, supportive government policies, and a skilled workforce have contributed to the expansion of the semiconductor industry. The country has been attracting significant investments from global semiconductor companies, leading to the establishment of manufacturing facilities and research centers.
Furthermore, Thailand’s proactive approach in fostering innovation and collaboration within the industry has positioned it as a competitive player in the global semiconductor market. The government has also been promoting initiatives to enhance the domestic semiconductor supply chain and develop local talent through specialized education and training programs.
As a result of these efforts, Thailand is poised to play a pivotal role in shaping the future of the semiconductor industry in the SEA region. With continued advancements and strategic partnerships, the country is well-positioned to strengthen its position as a key hub for semiconductor manufacturing, research, and development.
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