More than 20,PCB industry transfer accelerates, Thailand becomes the preferred destination

Source: Huaqiang Microelectronics Author: June

    Introduction: At present, global PCB manufacturing enterprises are mainly located in Chinese Mainland, Taiwan, China, Japan and South Korea, Southeast Asia, the United States and Europe. Among them, Chinese Mainland has developed into the most important production base of the global PCB industry, accounting for more than half of the global production capacity. In recent years, with the continuous change of the international situation, in order to cope with the uncertainty brought by geographical zz, some customers hope to transfer orders from Chinese Mainland.

    According to the latest news, according to public information, a large number of PCB companies, including Shanghai Electric Corporation, Oshkon, Zhongjing Electronics, Sihui Fushi, Zhongfu Circuit, Mingyang Circuit, and Shenghong Technology, have plans to establish factories in Thailand, Vietnam, and other places. The trend of PCB industry transfer to Southeast Asia has emerged.

    According to reports, Zhongfu Circuit, an A-share PCB listed company, is actively preparing for a Thai factory. Wang Xianfeng, its general manager, stated at a public meeting that investing in Thailand is mainly based on customer needs and has had ideas since two years ago. On the other hand, it is also in response to the national demand for the construction of the "the Belt and Road". It is hoped that more enterprises will go out and form the scale and environment of industrial support overseas. The problem of raw material transportation that affects overseas investment will change in the next three to five years.

    Shenghong Technology is also planning to invest and build factories in Southeast Asia. At the recent shareholders‘ meeting, Shenghong Technology disclosed to the media that the company has conducted detailed investigations in Vietnam and other places. The main purpose of building factories there is to provide support for overseas customers. The proportion of the company‘s exports has reached over 60%, and customers are also moving outward. Building factories there can also reduce some geographical impact, resulting in market growth.

    Zhang Peike, Chairman of Mingyang Circuit, once stated at a public meeting that Mingyang Circuit is taking internationalization as its strategic direction and investing in Southeast Asian countries, which is a measure of the company‘s global strategic layout. In terms of personnel, logistics, industrial chain, and geographical advantages, Vietnam, Thailand, and Malaysia can be considered as key countries for investment layout in Southeast Asia. Taking into account various factors such as transportation costs, Thailand and Malaysia have prominent advantages.

    In addition, Shen Qingfang, chairman of Apple‘s PCB supplier Zhending, said that the assembly is very easy to move, but the PCB is not easy to move. In addition to the huge investment, environmental protection, hydropower and other issues should be considered, and this matter must be evaluated from the perspective of economic behavior. Apple has not yet asked Zhending to set up production bases outside Chinese Mainland, which is not necessary for Zhending to move immediately, but will be evaluated in the long run. Moreover, Zhending has set up a rear module factory in India four years ago. Li Dingzhuan, the general manager of Zhending, also said that at present, the existing customers are still acceptable to the production base in the mainland, but it is inevitable that the production base in Chinese Mainland will be needed in the future.

    According to the latest data from relevant institutions, there are more than 20 PCB companies that plan to invest in or have established factories in Thailand, including Japanese manufacturers such as CMK, Fujikura, Mektec, and Mitsubishi Gas, as well as Taiwanese manufacturers such as Xinxing, Dingying, Taihong, Taiyao, Lianmao, Huatong, Huihe, Taiding, Jingpeng, and Jingguo, as well as Shanghai Electric Power Co., Ltd., Oshkon, Zhongjing Electronics, Sihui Fushi, Zhongfu Circuit, Mingyang Circuit Domestic manufacturers such as Shenghong Technology.

    Since the second half of 2022, along with the continuous improvement of local industrial supporting facilities, A-share listed PCB companies have shown an even greater trend to invest and build factories in Thailand.

    As early as June 7, 2022, Shanghai Electric Power Co., Ltd. announced that the company plans to establish a Thai subsidiary and build a new production base in Thailand.

    Shanghai Electric Power Co., Ltd. stated that overseas customers of the company generally pay attention to and strengthen the implementation of the geopolitical risk diversification strategy, and take measures to reduce logistics and capacity risks in the supply chain. As an emerging market economy, Thailand has comparative advantages in terms of land, factory buildings, manpower, and taxes. In recent years, Thailand has also undertaken a large number of printed circuit board capacity transfers, and related industrial chain supporting facilities have been continuously improved, which can better meet the needs of the company to build production bases.

    On December 19, 2022, Oshkon also announced that in order to better meet the order needs of international customers, improve international competitiveness and service capabilities, the company plans to invest no more than 1.2 billion yuan to build a production base in Thailand.

    On December 23, 2022, Zhongjing Electronics announced that the company plans to invest in a new production base for printed circuit boards (PCBs) in Thailand. The main products are high-density multilayer boards (MLBs) and high-density interconnect boards (HDIs), with key application areas including automotive electronics, computers, and network communications. The planned investment amount of the project does not exceed 550 million yuan.

    On February 20, 2023, Sihui Fushi released an announcement that, due to the needs of business development and increasing the layout of overseas production bases, on the basis of full research and assessment of overseas low-cost regions and regions with relatively sound electronic information industry chain, the company actively responded to and implemented the "the Belt and Road" initiative, and decided to invest in new production bases in Thailand, with a planned investment amount of no more than 500 million yuan.

    It is believed that due to the weak ability of a single production base to withstand risks, building a diversified industrial layout has become a trend in the global PCB industry, while Southeast Asia, with its labor cost advantages, has become the focus of PCB manufacturers‘ transfer. Compared to other Southeast Asian countries, Thailand is the preferred destination for manufacturers of traditional PCB products such as single panel/double panel and multilayer boards to invest in Southeast Asia.