Partners, rivals — Thailand and Vietnam chase chip FDI

Vietnamese Party General Secretary and President To Lam’s official visit to Thailand from May 27 to 29, held as the two countries mark 50 years of diplomatic relations, has given both governments and the private sector a platform to turn political goodwill into deeper business cooperation.

The Thailand–Viet Nam Business Forum 2026, held in Bangkok on May 28, brought together senior officials and business leaders to build networks and explore cooperation in key economic sectors.

At the forum, To Lam said no country could grow in isolation, stressing that Thailand and Vietnam must move forward together to strengthen their economies and contribute to sustainable development across ASEAN.

Vietnam, with a population of about 100 million, is rapidly expanding as a manufacturing and industrial base in the region.

Thailand, meanwhile, has deep strengths in automotive production, food, energy, trade and services, as well as a strong private sector.

By combining those advantages, the two countries could develop supply chains, connect production bases and become key regional hubs for manufacturing and exports.

Prime Minister Anutin Charnvirakul said Thailand has already invested heavily in Vietnam and would like to see more Vietnamese businesses invest in Thailand.

As the two economies are similar in scale, he said, they should not view each other simply as competitors, but as trade partners and growth partners.

In official remarks, Anutin also framed the relationship as complementary, saying: “When Viet Nam grows, Thailand grows.”

The two leaders also held official talks at Government House, where Thailand and Vietnam exchanged four cooperation documents.

These included an action plan to implement the Thailand–Vietnam Comprehensive Strategic Partnership for 2026-2031; an exchange of diplomatic notes between Thailand’s Ministry of Higher Education, Science, Research and Innovation and Vietnam’s Ministry of Science and Technology; a memorandum of understanding on cooperation to develop an aircraft maintenance, repair and overhaul centre at U-Tapao Airport between the Eastern Economic Corridor Office and Vietjet Group; and an MOU between Vietnam’s Academy of Politics, Public Administration and Governance and Khon Kaen University.

The private sector also used the occasion to push regional expansion.

Central Pattana Plc signed a cooperation agreement with Vietnam’s Sun Group to study retail-led mixed-use developments, with Central Pattana planning to invest US$2 billion, or around Bt66 billion, over the next 15-20 years while remaining open to potential partners.

Under the MOU, the two companies are exploring premium shopping centres and mixed-use complexes in major Vietnamese locations including Da Nang, Ho Chi Minh City and Phu Quoc.

Partners — and rivals — for FDI

Behind the language of partnership, Thailand and Vietnam are also two of ASEAN’s most important destinations for foreign direct investment.

Both are competing hard to attract high-tech industries that can upgrade their economies, particularly semiconductors, data centres, AI and advanced electronics.

Thailand’s Board of Investment said first-quarter 2026 investment applications exceeded Bt1.016 trillion across 624 projects, led by digital and electronics investment linked to the AI wave.

FDI accounted for 427 projects worth Bt965.869 billion, while full-year 2025 FDI applications reached about Bt1.36 trillion.

Vietnam, meanwhile, recorded US$15.2 billion in registered FDI in the first quarter of 2026, with manufacturing and processing continuing to dominate inflows.

Jareeporn Jarukornsakul, chairperson of the executive committee and group chief executive of WHA Corporation Plc, said BOI data confirmed Thailand’s strength as a regional electronics base, particularly in printed circuit boards.

She said 60% of the world’s top PCB companies from Taiwan had established production bases in Thailand.

Thailand’s advanced-technology industries are also growing rapidly, especially data centres, which are driving domestic demand for chips and semiconductors.

“Thailand has attracted a large number of data centres. You can see the chip supply chain following them in, so we should not be worried about chip investment in Vietnam because Thailand already has a significant domestic chip industry,” Jareeporn said.

To maintain leadership and keep drawing high-tech investment, she said Thailand must urgently strengthen four fundamentals.

The first is clean energy, which has become a core requirement for multinational investors.

Thailand must accelerate its national power development plan, especially clean energy such as solar power, while also considering new alternatives such as small modular reactors, or SMRs. Data centres and modern factories need stable, clean electricity 24 hours a day.

The second is water management for heavy industry. Jareeporn said Thailand should use digital dashboards to integrate water management, prevent repeated droughts and floods, and introduce innovations such as desalination and the recycling of wastewater into premium-grade water.

The third is skilled labour. Thailand must upgrade its workforce so that it can support increasingly complex technology.

The fourth is infrastructure. Although Thailand already has a good foundation, she said it must continue upgrading towards green infrastructure, especially clean power for data centres and modern logistics systems for next-generation industries.

Samsung’s Vietnam push seen as no threat

Jareeporn also played down concerns over Samsung’s semiconductor expansion in Vietnam, saying the investment should not be seen as a threat to Thailand.

Samsung has long had a major base in Vietnam, particularly in the north and around Hanoi.

“Samsung’s additional investment is more about business expansion than a production-base relocation that would affect Thailand. Historically, Japanese investors chose Thailand as their regional anchor, while South Korean companies moved strongly into Vietnam. Samsung has been investing there for decades,” she said.

Reuters reported this week that Samsung plans to invest US$1.5 billion in Vietnam to build its first chip testing plant in the country, focusing on DRAM and NAND memory chips, with operations expected to start in November 2027.

Samsung is already Vietnam’s largest foreign investor, with more than US$23 billion committed over decades.

Montri Mahaplerkpong, vice-chairman of the Federation of Thai Industries, also said Samsung’s chip expansion in Vietnam was not a sign that Thailand was losing ground.

Samsung already has a huge mobile-phone production base in Vietnam, he said, so the new investment is a natural extension of its existing electronics ecosystem.

Thailand, by contrast, remains strong in attracting electronics investment.

In 2025, more than 33 Taiwanese PCB manufacturers and chip-related companies invested in Thailand, underlining the country’s continued appeal as a production destination.

Montri said Thai industry is at a crucial transition point as it moves into advanced technology. The opportunities are enormous, but so are the risks.

First-quarter BOI applications of around Bt1 trillion were significant, he said, because such a level would once have taken a full year to reach.

More importantly, 60-70% of that amount, or Bt600-700 billion, was linked to data centres, AI and advanced electronics, future industries that could lift Thailand’s competitiveness.

Water and power could decide Thailand’s edge

Montri warned that the scale of new investment in Thailand was raising concerns about infrastructure readiness.

If the country cannot solve key bottlenecks, they could become barriers to future investment.

The first challenge is clean energy and energy restructuring.

Data centres and AI businesses need clean power, meaning the government must make the power development plan clearer and faster.

He said SMR technology should be brought forward, as leaving it near the end of the plan in around 12 years would be too slow for investors.

The second challenge is water shortage in the Eastern Economic Corridor.

Data centres require large amounts of water, while the EEC already faces recurring dry-season shortages.

If Thailand cannot manage water properly, he warned, investors may choose Malaysia, which is seen as better prepared in both water and electricity.

Thailand pushes national chip plan

Thailand and Vietnam have both announced policies to attract investment in future industries, especially semiconductors, which remain in high demand globally.

Narit Therdsteerasukdi, secretary-general of the BOI, said the National Semiconductor and Advanced Electronics Policy Committee, chaired by Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas, had reviewed the first draft of Thailand’s semiconductor strategy before the House dissolution. The draft will be revised and resubmitted to the committee.

“A new semiconductor board is now being proposed. Initially, we expect the final plan to take effect in the third quarter of this year,” Narit said.

The strategy is built around the “Made-in-Thailand Chips” concept and targets Bt2.5 trillion in investment over 25 years, from 2026 to 2050.

It also aims to develop 230,000 skilled workers, create a full semiconductor ecosystem and encourage investment in upstream wafer fabrication. BOI’s earlier roadmap identified power semiconductors, sensors, photonics, discrete devices and analogue chips as areas aligned with Thailand’s existing industrial strengths.

Vietnam is moving aggressively as well.

Its strategy aims to train 50,000 semiconductor personnel by 2030, including at least 15,000 specialists in chip design and research and 35,000 workers in assembly, testing, packaging and manufacturing.

Vietnam’s National Innovation Center has also worked with global technology companies including Synopsys, Arm and Marvell to expand semiconductor training.

Professor Duy-Hieu Bui of Vietnam National University said the key to Vietnam’s plan is collaboration through the National Innovation Center, which links universities, the government and global technology firms such as Synopsys, Arm, Marvell and Intel.

Vietnam is also investing in infrastructure, including plans for a 32-nanometre wafer plant with capacity of 5,000 wafers per month under state telecoms group Viettel, while offering tax incentives to attract and retain specialists and researchers.

Thailand urged to build chip alliances

Aroonchat Chatchaikarn of Lancelot IC and System Thailand said the business reality is that Thailand is still largely a backup site for multinational companies. The key question is whether the country can eventually become more self-reliant and own technology.

He said Thailand should not compete “eye for eye, tooth for tooth” with global giants, as that would carry a high risk of failure. Instead, the better strategy is to build partnerships and promote complementary strengths rather than compete head-on.

Aroonchat said Thailand’s roadmap is moving in the right direction by focusing on areas such as power connectors, sensors and specialised devices.

Bangkokbiznews , ThailandPRD , SawasdeeThailand , SOCIALIST REPUBLIC OF VIET NAM , Vietnam+ , BOI , Reuters