Macro Economic

Thai government is likely to provide a financial support to the upstream electronics or wafer fabrication facilities in an effort to draw foreign investors to set up plants in Thailand.

Mr Danucha Pichayanan, secretary general to the National Economic and Social Development Council (NESDC), said the agency and related agencies such as the Board of Investment, Industry Ministry and the Eastern Economic Corridor (EEC) are considering a new policy to promote the upstream industry of electronics or wafer fabrication.

He said it is essential for the government to allocate some budget for investors to build wafer fabrication plants, which are an upstream industry in electronics. The high-tech plant needs a massive scale of investment of more than 10 billion baht per a plant.

“The government expects to finalize this investment policy soon which will help drive Thai economy after easing Covid-19 epidemic measures amid global economy uncertainties, caused by the conflicts among powerful countries,” he said.   

Currently, Thailand has relied on wafer fabrication import to use in the midstream and downstream electronics.

 “If Thailand wants to upgrade itself to the smart electronics and high technology, wafer fabrication is such an answer because it seems a significant infrastructure to develop the electronics industry,” he said, adding many countries such as Japan and the US have encouraged their high-tech electronics industry as well via the launch of financial allocation. 

 Investing wafer fabrication plant in Thailand will help strengthen Thailand’s ambition to develop S-curve industries. Also, it can solve the semiconductor chips shortage in long term due to the prolonged conflicts among the US, China and Taiwan, resulting in a cut in semiconductor supply to worldwide.

NESDC reported that conflict between the US and China has led China to ban computer chips or semiconductor import from Taiwan, which accounted 70% of the semiconductor supply to worldwide.

If the conflict remains to continue, it may affect to Thailand’s supply chain because the kingdom have to import Taiwan’s raw materials of circuit board to use in the electronics industry.

Electronics chip shipped from Taiwan to Thailand was valued at US$10.51 billion in 2021. Of the total, circuit board topped the rank with $4.61 billion or accounted 43.9% of total import from Taiwan.

Earlier, Japan had planned to allocate about 600 billion yen ($5.2 billion) from its fiscal 2021 supplementary budget to support advanced semiconductor manufacturers including the world's top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC). As part of the stimulus package, the Japanese government will invest about 400 billion yen in a new factory to be set up by TSMC in Kumamoto prefecture, southwest Japan.

Also, late July, the US’s Senate passed the CHIPs Act, a $52 billion package that aims to boost semiconductor manufacturing in the US.