Thailand Ramps Up Campaign Boosting Japan’s Semiconductor Involvement

In June, ASEAN’s semiconductor competition got more intense with Thailand’s involvement. The country’s economic ministers discussed sending Thai students to train in Taiwan to counter lack of advanced skills.

The government of Thailand plans to establish a national semiconductor board to set investment and development strategies for this vital industry, Commerce Pichai Chunhavajira said on 14 June 2024. This came after Vietnam declares match with Malaysia, who plans to build Southeast Asia’s largest integrated circuit design park and will offer incentives including tax breaks, subsidies and visa exemption fees to attract global tech companies and investors.

Bangkok Post quoted Pichai adding longtime major investor can help Thailand move up the value chain. He urged Japanese businesses to invest in Thailand, especially in the semiconductor and high-tech industries. The government expects to see more investment from Japan because, after the 2014 coup, investment from the country fell by as much as 90% and has not yet returned to pre-2014 levels, Pichai said on 24 September 2024.

China was the leading source of foreign direct investment in Thailand in 2023, while Japan had slipped to fourth place, However, the value of approved Japanese projects in the first seven months of this year has topped the table at THB 40.2 billion, according to Board of Investment figures.

“We hope Japan will increase its investments in Thailand. I would like to request Japan takes another look at Thailand as a manufacturing location, based on our sincere intentions. We’ll put in a lot of effort to help you. The Board of Investment also has incentives to support you,” he said at an event to mark the 70th anniversary of the Bangkok office of the establishment of the Japanese External Trade Organization (Jetro).

The industry the government wants to promote the most right now is semiconductors because a lot of international printed circuit board (PCB) companies have shifted their production bases to Thailand, with a total investment of about THB 150 billion last year.

The bulk of this, according to data from the Bank of Thailand, comes from firms in China, Taiwan, Japan and Hong Kong. Pichai said there would be increased investment in the industry.

“We would like Thailand to serve as the production base for semiconductors and PCBs. Thailand will also welcome Japanese companies to grow or relocate their production bases from China,” he said.

Furthermore, the government aims to encourage foreign investment in the high-tech sector. If Thailand can transition to this, it will raise the standard of skilled labour and award workers higher pay, he said. He added the government also aims to boost the electric vehicle sector, making the nation the centre of production for all right-hand drive EVs.

“The world needs clean, green energy. The trend is preparing for this, which is quite significant for Thailand as it gives us a chance to catch up with the opportunity. Electric vehicles are the way of the future; combustion vehicles are losing ground,” he pointed.

When asked if Japan still has reservations about EVs and prefers to focus on hybrid cars, Pichai said these are another way to address the shift to cleaner energy use.

“Japan may still believe in hybrids more than EVs. It depends on their school of thought,” he said.

“Today, China has more than 400 EV brands, and only about 100 will survive. Yet China will continue to be the world’s primary supplier of EVs, which will fuel market growth.”

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