Monday, October 26, 2020

Booming Digital Industry boosts Thailand’s Smart Electronics

Oct 01. 2020
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As digital technology becomes firmly entrenched in the battle against the COVID-19 pandemic, it is not only in healthcare where it takes a prominent role but also increasingly in business operations and even people’s daily lives. In this changing environment, Thailand has shown itself to be one of the world’s most resilient and thriving smart electronics manufacturing hubs.

To alleviate the impact of the pandemic on their operations, businesses are adopting technologies such as videoconferencing, e-commerce, augmented reality (AR) and virtual reality (VR) to reach out to consumers and foster connections in keeping with social distancing practices. In this digital marketplace, speed and data can give businesses a competitive edge, resulting in the demand for cloud and quantum computing, machine learning and artificial intelligence being driven at an accelerated pace.

AI and other modern technological innovations such as blockchain, robotics and automation also benefit healthcare practitioners, researchers and policy makers across the globe, not only in the race for a vaccine against the disease, but also in tracking infections and treating patients.

With working practices and people’s lifestyles demanding greater mobility and connectivity, the so-called “Internet of Things” continues to in leaps and bounds, as the system of connected computing devices answers the needs of both corporations and individuals.

Backed by the breadth and depth of its ecosystem, comprising global manufacturers and local business and skilled human resources, Thailand’s vibrant electronics and electrical (E&E) industry has underpinned the country’s exports for decades.

The Ministry of Commerce’s data show that exports of E&E products accelerated in the period from January to April this year, as the pandemic forced people to work remotely and become more accustomed to e-commerce and digital platforms. Thailand’s exports increased by 4.2% year-on-year in March against 1% growth during January to March during the same period in 2019. Besides processed food, exports of computers and parts also accelerated sharply, with an 18% year-on-year increase during January to April 2020, compared with 9% year-on-year growth for the same period last year. The outbound shipments of air conditioners also held up during the period, despite the dim global economic outlook1.

E&E products have driven Thailand’s export sector for decades, accounting for one-fourth of the country’s total export revenue each year. The Thailand Board of Investment also reported a promising trend of investment in the industry, which had the highest value of new investment projects in the first half of 2020.

Thailand’s vibrant E&E industry ecosystem is the result of ongoing development and technological transfer by multinational companies over the past five decades. Spearheaded by multinational companies, Thailand’s E&E industry supply chain is currently comprised of more than 2,500 enterprises, employing around 753,000 workers2. Given its prominence in Thailand’s economic development, the E&E industry is one of the 12 targeted industries identified by the Thai government as the new engines of growth, with priority given to efforts aimed at further developing the skills of workers and promoting investment in these industries. Thailand’s Ministry of Industry has designed a development plan intended to help these industries increase their innovations and strengthen their competitiveness through the adoption of more new technologies by 2029.

 

Moving Towards Smart Electronics

As technology continues to move the world towards greater internet connectivity and self-ordering functions, Thailand’s E&E supply chain and workforce are more than ready to adapt to the smart electronics industry. The country is moving towards the production of high-value and sophisticated electronics and electrical appliances, leveraging its high competency in modern technologies and complete supply chain for E&E manufacturing.

Thailand’s prominence in the global supply chain of the E&E industry is proven by the fact that the country’s exports of important components such as Hard Disk Drives (HDDs) and Integrated Circuits (ICs) account for one-third of the global demand each year.

Changing consumer behavior towards greater connectivity has driven Thailand’s production of more sophisticated HDDs and ICs, such as sensor-equipped HDDs, solid state drives (SDD), smaller IC units, semiconductors, microelectronics and embedded system design. These products serve digital service providers and smart electronics manufacturers of high-growth segments such as data centers and cloud computing providers, as well as providing the Electronic Control Units (ECU) and LED Chips used in the automotive sector and Touch Screen Controllers and LCD drivers in smartphones.

The country is also a prime investment location for embedded software testing and development thanks to its reliable electricity supply, stable internet connectivity as well as the readiness of its skilled and affordable workforce. Thailand is currently the largest desktop/personal 3D printer producer in the world, accounting for one-fourth of global market share, placing the country ready to serve growth in aerospace, electronics, automotive, jewelry, education and healthcare industries.

Thailand also has a solid reputation as one of the largest electrical appliance producers in the region, with over 1,060 electrical appliance factories across the country contributing to its position as the world’s largest exporter of air conditioners and washing machines and one of the top manufacturers of many other electrical household appliances.

In light of the disruptive pace of technological changes, Thailand is rapidly becoming a hub for the manufacturing of smart appliances. With functions that include self-ordering, sensor systems, and multiple connections with internet devices, products such as remotely controlled electrical devices, refilling refrigerators, and smart TVs with digital connections will continue to make the lives of consumers easier while also offering energy optimization for modern home use.

 

A Resilient Smart E&E Manufacturing Base

A cost-effective work force that is adaptive to the relentless changes in technology, a robust supply chain, and an excellent logistics network have all attracted key global manufacturers in the E&E industry to Thailand. The country’s lucrative market for smart electronics is further underpinned by demand from its automobile production base, which is the largest in Southeast Asia.

Thailand has gained an international reputation for the responsive action of its people and the strengths of its medical sector in curtailing the COVID-19 pandemic, with the country ranking number one in the world on the Global Covid-19 index, calculated from a combination of big data analysis and scores derived from the Global Health Security Index3.

To avoid the disruption of the operations of investors during these unprecedented times, Thailand’s Board of Investment has rolled out measures to facilitate the online submission of documents for investors and made better use of its digital channels in reaching out to them.

The Thai government has identified Smart Electronics as one of the targeted industries serving as a key source of economic growth in the coming decades and contributing to an important foundation for automation and robotics, digital, next generation vehicles and the bioeconomy in Thailand.

Thailand’s human resources are the cornerstone of the government’s ongoing efforts to further enhance the agility and resilience of Thailand’s E&E industry supply chain. In this respect, the country has more than 60 public and private engineering academies and institutes which are accredited by the Council of Engineers. Joining forces, these institutions produce a skilled workforce and match these human resources with the demand from the E&E industry.

Thailand’s location at the center of the Southeast Asia region, its highly- productive logistics network, and its ease of doing business environment have underpinned its attractiveness to global manufacturers and their strategy of using the country as a gateway not only to the ten-membered Association of Southeast Asian Nations (ASEAN), but also to Asia and the Pacific region beyond.

Thailand is competitively ranked 21st out of 190 economies in the World Bank’s 2020 Ease of Doing Business Index4, and 32nd out of 160 countries in its biennial Logistics Performance Index, placing it second only to Singapore among ASEAN countries5. The Eastern Economic Corridor (EEC)6, the country’s prominent new Eastern Seaboard Special Development Zone, has enhanced the competitiveness of the country’s E&E industry even further, with ASEAN’s forefront facilities for research and development, human resource training and business development. The EEC, situated in the country’s three Eastern provinces, houses development areas for the targeted industries, connected to the regional supply chain via modern rail, air and sea transportation networks.

 

 

reference

1 https://www.bangkokpost.com/business/1904620/state-upbeat-on-full-year-exports

2 https://www.eeco.or.th/en/intelligent-electronics

3 https://www.bangkokpost.com/thailand/general/ 1959567/more-praise-for-virus-response

4 https://www.doingbusiness.org/en/rankings

5 https://lpi.worldbank.org/international/scorecard/radar/254/C/THA/2018#chartarea

6 https://www.eeco.or.th/en/home

 

 

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