PM Srettha targets Tesla, TSMC investments to forge Thailand’s high-tech economy

Srettha revealed on Thursday that he had shown Tesla executives around three industrial estates in the country.

“They are looking for 2,000 rai [320 hectares] of land,” the prime minister said.

He expressed confidence the electric vehicle manufacturer would invest not just in a Thai EV manufacturing plant but in the country’s entire EV supply chain, generating substantial employment.

Srettha held a meeting with Tesla CEO Elon Musk in September.

The prime minister said a major deal is also being pursued to attract Taiwan Semiconductor Manufacturing Co (TSMC) to manufacture microchips in Thailand, utilising funds from the competitiveness enhancement fund.

A budget of 100 billion baht has been allocated to the fund to improve Thailand's manufacturing competitiveness.

Srettha gave an overview of his three-month-old government’s progress in attracting investment during a speech titled “Future of the Thai Economy” delivered at the National Institute of Development Administration (NIDA) on Thursday.

“We aim not for moderate earnings but to make Thailand a hub for new-age industries," he said.

Part of that aim involves luring leading microchip manufacturers to invest in Thailand, starting with TSMC, the world's largest chipmaker. Microchips form the heart and brain of new-age technology, with over 80% of global microchip production in Taiwan. However, strained relations with China are driving Taiwanese chip manufacturers to relocate production outside Taiwan.

PM Srettha highlighted his direct line with US Commerce Secretary Gina Raimondo, who will play a key role in facilitating the relocation of microchip factories to Thailand.

"This is Thailand's opportunity to attract investment. We are not leaning towards either the US or China. China is like the big brother and the US is like the big boss. We must utilise Thailand's advantage in this situation to attract investments. Our triangular diplomacy with China, the US, and Taiwan positions us to gain opportunities by being friends with all," Srettha said.

Attracting leading microchip manufacturers to Thailand would be a cornerstone for development of high-tech industries in the country, the PM added.

Thailand is prepared to offer significant financial support to foreign manufacturers, including free land and tax benefits ranging from 30% to 50% of the investment value. Without offering such benefits, the country could lose out to regional competition for investment from Indonesia and Vietnam and remain stuck as a low-margin, low-tech economy, Srettha said. He emphasised that the investment-seeking strategy was crucial for Thailand’s long-term development.

Turning to trade, he said Thailand has severely lagged in negotiating free trade agreements (FTAs) with other countries over the past nine years and had been overtaken by Vietnam. It was Hanoi’s success in negotiating FTAs, not Thailand’s new 400-baht minimum wage, that had driven investors to Vietnam, he said.

The government views trade agreements as critical to its mission of forging Thailand as a modern economy and trade hub, the PM continued.

Srettha said he would also lay out investment incentives for Japanese car manufacturers to relocate production to Thailand during his December 16-18 trip to Japan. The incentives cover production for export only, to align with Thailand's carbon reduction policy. Parallel incentives are on offer for EV and hydrogen-fuelled vehicle manufacturers.