Is Thailand the World’s Next PCB Manufacturing Base?

The country’s growing industry could prove a viable alternative to China.

I have been involved in the electronics manufacturing industry for over 20 years, with much of that time based out of Hong Kong. China is a manufacturing powerhouse, supplying not only the world but its own large population with electronic products ranging from home appliances to ultra-modern electric vehicles. China is well beyond being called a “developing nation.” It is a very mature economy – especially when it comes to any kind of manufacturing.

Recent geopolitical tensions from past and present US administrations, however, as well as supply chain concerns that came about during the Covid pandemic, have forced many OEMs and EMS companies to look elsewhere for their PCB needs – a task that is easier said than done.

In response to industry demands, I have traveled to several countries in southeast Asia over the past 18 months to learn as much as I can about the printed circuit board industry outside of China.

It was during my third and most recent trip to Thailand last July that I attended Thailand Electronics Circuit Asia 2024 (THECA), the electronics circuits and services showcase event in Bangkok.

The event did mark a milestone, as interest in Thailand’s future in PCB manufacturing is booming. In fact, from January 2023 to June 2024, investment applications for PCBs totaled over $3.9 billion compared to an average of $420 million for the same period in 2021 to 2022, according to the Thailand Board of Investment.

The Board of Investment is expecting more than $1.4 billion in investments from Chinese EV OEMs to set up manufacturing hubs to supply Asia, which has presented many opportunities for these new factories. BYD, one of the largest EV car manufacturers in the world, opened its first factory in Thailand in July.

Interestingly, most of the PCB manufacturers exhibiting at the show were from China or have factories being built in Thailand that are owned by Chinese PCB manufacturers or their investors.

Thailand has always had a strong PCB manufacturing base when it comes to low-mix and high-volume manufacturing. Like most other countries trying to mimic China’s success, however, it falls short when it comes to higher-mix, lower-volume, and higher-technology PCB manufacturing. That said, since early 2022, over 20 prominent PCB manufacturing companies from China, Hong Kong and Taiwan are planning or are currently building PCB manufacturing facilities in Thailand to expand the globalizing of their manufacturing capacity.

It is hoped this expansion brings opportunities. But it will also bring challenges as this is the first time some of these PCB manufacturing companies have invested heavily outside China.

During the show, I was able to talk to several general managers from different factories that are being built one to two hours outside Bangkok. These China-based managers have plenty of industry experience and were sent to Thailand to oversee the construction of their respective new facilities.

While they originally anticipated starting production earlier this year, the shortage of construction workers, the global economic slowdown and the uncertainty of incoming orders has forced these factories to most likely start operations later this year. 

The output of these facilities will be gradual, with their first phase expected to produce 40,000-50,000 sq. m. per month, using upwards of 300 employees each. Several of these new factories plan to cater to customers that require high-mix, low- to high-volume and higher technology. This capability is very important as Thailand has generally catered to low-mix, mid- to higher-volume orders that are not as conducive to the US market.

These managers are facing cultural and operational obstacles, including finding enough technical operators and engineers for their factories. With over 20 large PCB facilities currently manufacturing or about to begin operations in Thailand, machine operators, engineers and chemists are in high demand.

High demand means short supply and many established domestic factories have had technicians and engineers hired away by these manufacturing newcomers. The need for experienced personnel and PCB engineering training cannot keep up with Thailand’s high demand.

Language is another barrier among the Chinese and local Thai workers, as some managers say it takes upwards of a year for a factory to become a cohesive operation.

To help increase the employee supply base, several of these new facilities plan to send their Chinese employees to Thailand to train local hires, as well as source labor from outside Thailand.

Factories not only need employees but also need a supply chain to support their operations. While Thailand does manufacture raw materials, a major Chinese laminate supplier intends to open a new facility by Q4 2025.

The pricing for PCBs manufactured in Thailand is 10-15% higher than China. For now, the 25% US-imposed tariff does not apply to PCBs manufactured in Thailand. That is good news, but the average time to ship orders is much longer, averaging six to eight weeks. In comparison, China ships most product in three to four weeks or less.

The next 18-24 months will determine how successful Thailand will become as a PCB manufacturing powerhouse. The strength of the world economy and the politics that are put into play will determine the outcome.

Clement Yuen has more than 25 years’ experience selling PCBs directly for various fabricators and as founder of a leading distributor. He is cofounder of DirectPCB (directpcb.com) and can be reached at clement@directpcb.com.