Ongoing US-China tech war likely to benefit Thailand

The OIE Director-General Warawan Chitaroon said that this competition is expected to continue and has so far influenced several major semiconductor firms to shift their production bases from China to countries that are not direct competitors in the technology war, particularly those in Southeast Asia with relatively stable political environments.

Thailand has already seen some benefits from this situation, with some major companies relocating their digital camera production bases from China to Thailand, positively impacting various economic activities. The economy can be further strengthened if Thailand is able to attract investment from companies in industries affected by the competition between the US and China.

If account is taken of factors affecting the supply chain resilience of semiconductor and electronics production in each country, Thailand, Vietnam, and India have less complex technology, and mainly focus on contract manufacturing in the early stages. Malaysia, on the other hand, has complex production processes and utilises advanced technology, leading to higher average salaries. The average monthly salary in Malaysia is around US$788, followed by Thailand at around U$430, Vietnam at around U$325, and India at around U$126, Warawan added.

Thailand's supply chain resilience can compete with its counterparts since the competing countries are also industries with relatively similar complexity to Thailand. Each country has similar end-product manufacturing bases using components from the semiconductor industry, making them suitable for supply chain interconnection, according to Warawan.

Another plus is that Thailand has the potential to attract investment from these companies, Warawan said, adding that the government and private sector need to prepare for changing circumstances by pushing the Thai industrial sector to adopt advanced technology manufacturing. Entrepreneurs should plan risk distribution in the event of a global supply chain disruption by sourcing raw materials from multiple sources. The government is currently accelerating the promotion of new trade partnerships to expand the market for Thai products and services, Warawan added.