Can Thailand Compete in the Global Chip Race?

Thailand is positioning itself as a new hotspot for semiconductor and microelectronics manufacturing, building on existing infrastructure and establishing key partnerships throughout the region. Managing editor Jillian McNichol shares insights from her recent trip to Thailand where she toured facilities and interviewed industry leaders about the country's ambitious plans.

• Thailand has been involved in assembly and test operations since 1996 through the Thai Microelectronics Center
• Currently Thailand is the 10th largest automobile exporter in the world, with a strong focus on power electronics
• Tariffs present significant challenges, with Thailand currently facing a 36% tariff rate for exports to the US
• The Eastern Economic Corridor (EEC) is a key region for manufacturing, with industrial parks, universities, and port facilities
• Sustainability is a major focus, with Thailand aiming for net zero emissions by 2050
• Thailand is addressing talent shortages through university partnerships that prepare graduates for industry needs
• Strong alignment between government, companies, and educational institutions is driving Thailand's semiconductor strategy.

Learn more in Jillian's article, Thailand: An Emerging Force in the Semiconductor Supply Chain.  

Learn more about the Thailand Board of Investment

Contact Jillian McNichol on LinkedIn

Chapters

• 0:00 Introduction to Thailand's Semiconductor Industry
• 3:14 Thailand's Manufacturing Focus and Strategy
• 6:19 Tariffs and Trade Challenges
• 9:13 Eastern Economic Corridor Development
• 12:05 Sustainability and Talent Development
• 16:17 Thailand's Future in Tech Manufacturing

Transcript

Francoise von Trapp: 0:08

Hi there, I'm Francoise von Trapp, and this is the 3D Insights Podcast. Hi everyone. Now, if you read the 2025 3D Insights Yearbook, you may recall the cover was about hotspots and advanced packaging around the globe, and we had stories from the US, such as Arizona and New York. We had Europe, of course. We had Southeast Asia, including the Philippines, singapore and Vietnam, and that was just focused on advanced packaging, and we know that semiconductor manufacturing happens all around the world.

Francoise von Trapp: 0:44

But did you know that Thailand is getting into the game and positioning itself as a hotspot in semiconductor and microelectronics manufacturing? Recently, our managing editor, jillian McNichol, was invited by the Thailand Board of Investment to tour Bangkok and the surrounding region to learn about the country's investment in its infrastructure and visit some of the key microelectronics companies involved in this transformation. She just published an article about it on 3D Insights, and we thought it would be great to expand on that in a podcast interview. So here we are. Welcome to the podcast, jillian. Hi, thanks for having me. I can't believe we haven't done this before We've talked about it and we never have but I think it seemed like a good time, since this was something that you experienced and I have a lot of questions about. So let's just dive in. But before we do, can you start by giving us a little bit of a background on yourself?

Jillian McNichol: 1:37

Yeah, so, like you mentioned, I'm the managing editor at 3D Insights. For the last year or so, I've been going to a lot of the industry focused events and, other than that, I write a lot of high level content that's focused on the semiconductor industry, as well as some mildly technical articles that are kind of geared more towards support roles like sales or marketing or people who are newer to the industry.

Francoise von Trapp: 2:05

And, of course, you focus a lot on AI or what's being developed to support that. Yeah, okay, so how did this trip to Thailand come about then?

Jillian McNichol: 2:15

Yeah, the Thailand Board of Investment reached out to 3D Insights asking if we wanted to be part of their upcoming media trip in Bangkok and the surrounding regions, and it was a really quick turnaround. I think I had about 10 days of notice. So I agreed to the trip and I was super excited and 10 days later I was in Thailand and I had a really great time. So tell us about the trip when did you go and what did you see? Yeah, so we traveled through Bangkok, we traveled through the EEC, the Eastern Economic Corridor, we went to Pattaya Beach and then we went back to Bangkok. So we were there for a whole week and we visited a mix of places and companies, so large companies like Hanna Semiconductor and Kimball Electronics, and then local companies like Silicon Craft, which didn't make it into the article, unfortunately, but it's Thailand's first and only semiconductor design company.

Francoise von Trapp: 3:14

Why do you think Thailand is suddenly jumping on the semiconductor manufacturing bandwagon?

Jillian McNichol: 3:19

I wouldn't say that it's sudden. I think they've been sort of building up to this for a while. I know that they've been a player in assembly and test for a while, and the Thai Microelectronics Center that I did mention in the article. They've been around since, I think, 1996. But I will say that I do think Thailand's government really is starting to understand that semiconductors and other advanced technologies are the future and they do want to be competitive with other Southeast Asian nations like Vietnam and Indonesia, who are really propelling forward right now.

Francoise von Trapp: 3:52

It seems like a good time for them to get involved. In what way?

Jillian McNichol: 3:55

So they are really focused right now on manufacturing in general. So they do have a lot of manufacturing operations out there that I was surprised to see. They're actually the number 10 biggest exporter of automobiles in the world and they do a lot of car manufacturing, and I didn't really touch on that in the article because I wanted to focus it more on semiconductors. In terms of specific things that they're focusing on, power electronics is a really big one. Many of the really large companies like Delta and Benchmark, who I didn't actually get to visit, they're leaders in this area and they do have a pretty strong presence in Thailand. And then I was also doing some digging on this on my own and I found a press release from the BOI from 2020 that actually highlighted how investments in power electronics were actually higher in 2020 than they were before COVID, and it's Thailand's most popular sector, so it's something that they're really invested in.

Francoise von Trapp: 4:58

So do you think that's because automotive electronics, especially around the time of COVID, when there was suddenly a shortage, electronics, especially around the time of COVID, when there was suddenly a shortage, it was on the map for everybody and they were able to ramp up.

Jillian McNichol: 5:10

Yeah, I think so.

Francoise von Trapp: 5:17

Okay, but in your opinion, after visiting these places, what do you think are some of the challenges they need to overcome to compete in this industry?

Jillian McNichol: 5:21

I think right now, from my visit, I would say that the tariffs are really impacting them. I know when I went, nobody really seemed that concerned about tariffs. Their strategy at that time and it's still their strategy now but they were going to comply with the Trump administration to ensure a favorable tariff rate. But they're still at a 36% tariff rate as of today. I just checked. So that's really challenging, especially because the US is their biggest export market. I think it's about 18%, so that's really tough on them. So I think they understand the importance of maintaining a positive relationship with the US despite these challenging conditions and I think the tariff rate is really going to impact a lot.

Francoise von Trapp: 6:10

And these are tariffs on power, electronics, on everything.

Jillian McNichol: 6:13

On everything.

Francoise von Trapp: 6:13

I think yeah. So they're exporting from a perspective of the semiconductor industry. They're exporting their power electronics to automotive manufacturers. The US isn't their only market.

Jillian McNichol: 6:25

No, not at all. They export a lot all throughout Asia and Europe as well.

Francoise von Trapp: 6:31

Of all of the companies that you visited, were they all based in Thailand, or were some overseas companies that just have a presence there?

Jillian McNichol: 6:39

Some were based in Thailand. So obviously the Thai Microelectronics Center is based in Thailand. The university is based in Thailand, hanna Semiconductors based in Thailand. So obviously the Thai Microelectronics Center is based in Thailand. The university is based in Thailand, hanna Semiconductors based in Thailand, delta is Taiwanese and then Benchmark, who I mentioned but did not visit, is based here in Arizona.

Francoise von Trapp: 6:59

Right, and then there was also Kimball.

Jillian McNichol: 7:01

Kimball's, based in Indiana.

Francoise von Trapp: 7:02

Indiana. In terms of the tariffs and trade strategies, did anybody say anything about companies that weren't based there having a presence there and how the tariffs are going to impact them?

Jillian McNichol: 7:16

Yes, kind of. So a lot of the companies really did not seem concerned at all whatsoever back in May with tariffs. They thought that if they comply they'll get a favorable rate, it'll be fine, everything's good. But you know, two months later, keeping up with the news, that doesn't seem to be how it's shaping up. I did find an article and this is not information that I gathered myself, it's information I found online their Japanese and Chinese customers moving over to a country like Vietnam for manufacturing instead, because Vietnam did get a more favorable tariff rate. So if something like that does actually happen, it could really impact Thailand's manufacturing industry. However, personally, from my experience being there, I don't think that will happen.

Francoise von Trapp: 8:15

But it seems like moving that stuff is complicated, it is.

Jillian McNichol: 8:19

It is. They did talk to me about that at Kimball electronics, because they do a lot of medical devices and moving a medical device is very, very difficult, and they did highlight that. If they have to find alternate routes, um, they will, but it's not ideal, it's not favorable, and if a life-saving device needs to make it in America, then we're going to pay the tariff anyway.

Francoise von Trapp: 8:45

Because I'm thinking Kimball is a US company. They're manufacturing in Thailand and shipping the devices to the United States, so they still have to pay the tariff, even though that they're a US-based company. I believe so, but I can't say for sure, it's very complicated.

Jillian McNichol: 9:04

It is, and it changes every day.

Francoise von Trapp: 9:06

You talk about in your article, Thailand's Eastern Economic Corridor as one of the keys to Thailand's success.

Jillian McNichol: 9:13

Yes, so the EEC is actually a region within Thailand and I did get to visit and there's a lot there. So I didn't get to see everything there, but I did get to see a lot. I visited two industrial parks within the EEC that do have a lot of manufacturing there, but it's not just semiconductors or even electronics, it's cars, it's consumer goods, it's food. We drove past the Biscoff cookie factory, which I guess is in Thailand. Did you bring any samples home? I did not.

Jillian McNichol: 9:48

That wasn't a big part of our trip but yeah, I thought that was really interesting. And we also visited a local university there that had the first semiconductor R&D program. And then we visited the Thai Microelectronics Center, which has been there since, yeah, about 1996. What else? We visited Lam Chabang Port and we attended a conference and two industrial parks. So what was the conference Subcon Thailand? It was this conference that basically helped match businesses with contractors. So it was focused on multiple different technology applications. But we did go to the keynote sessions that were led by prominent leaders in the Thai government and we learned a lot about their strategies for the supply chain and for trade. So that was one of my favorite parts of the trip.

Francoise von Trapp: 10:46

So what did you learn, then, about their supply chain approaches?

Jillian McNichol: 10:50

So their approach to their supply chain. They have a very strategic location within Southeast Asia because they basically are able to connect China with the rest of Southeast Asia just due to their natural geographic placement. So what they're trying to do is expand their infrastructure and we did get to visit Lam Chabang Port, which is their biggest port, and they're currently undergoing phase three expansion right now. So once they're able to do that, they'll be able to qualify to be one of the top 10 busiest ports in the world with the amount of cargo that port will be able to support Um. So that was another really key part of the trip that I really enjoyed. And they also have plans to build a land bridge to connect Um. That's Southern Thailand. I didn't get to see that or visit, I don't think they've even started that yet, but they have plans to connect East Thailand to West Thailand to kind of make the supply chain a little bit easier, especially because I understand the traffic in that region is crazy, so this will help bypass that.

Francoise von Trapp: 11:54

Wow, okay, two of the main semiconductor industry pain points these days includes sustainability and also the talent shortage, and in the article you talked a lot about how Thailand is addressing these challenges. Can you talk a little bit about that?

Jillian McNichol: 12:07

Yeah. So something that I was really inspired by when I went was how so many people seem so excited about the possibilities of renewable energy, and I thought that was amazing and I loved learning about that. It's a huge focus for them, like they understand that in order to develop their industry, they need to do it as sustainably as possible, and they do seem to have really great alignment between their government as possible, and they do seem to have really great alignment between their government, their companies and even the university as well that we visited seemed very on top of that. So I think in the article I mentioned that they're trying to reach net zero emissions by 2050. And I think that they will achieve that.

Francoise von Trapp: 12:54

In your article. Yeah, you mentioned a quote from the head of marketing for Delta. Can you share that here? What did he say?

Jillian McNichol: 13:04

He said that if ESG isn't top down then it's greenwashing, and I remember when he said that I was viciously writing it down I was like that is such a great quote and it's so true. And it just was really inspiring to me because, you know, it's something that I care about personally making sure all of this is as sustainable as possible, because we have to consider the impact that all of this technology is going to have on future generations. And to hear that passion come from somebody who you know is part of such a big company like that, I thought that was really special.

Francoise von Trapp: 13:42

And by top down meaning from the CEO.

Jillian McNichol: 13:45

Yeah, from the CEO, from the government down to everybody else. If they're not prioritizing ESG, then it's just marketing. It's just marketing, it's just greenwashing yeah.

Francoise von Trapp: 13:54

Yeah, and we do see a lot of that and we hope that that's not going to be the case.

Jillian McNichol: 14:06

Okay, and the other thing that we talk a lot about is the talent shortage. How are they handling that? So a big way that they're handling the talent shortage is through their university system. So the one that we visited, ktiml. It had the first ever semiconductor R&D center and it's one of four universities, I believe, that support semiconductor manufacturing in Thailand. And something I found really interesting about their programs was how they work with the companies in Thailand to get a sense of, okay, what does this company need and how can we prepare our graduates for real employment within the Thai microelectronics industry. So I do think they're really on top of that and their strategy, in my opinion, seemed very similar to the one that ASU was taking with the governments here.

Jillian McNichol: 14:51

It's still a challenge. They did mention that it is hard to inspire Thai students to go into engineering fields and a big reason for that is because they don't fully understand what to do with their engineering degrees and they tend to favor humanitarian fields and go into that. So there is kind of a push right now to promote STEM education to build the workforce.

Francoise von Trapp: 15:16

It sounds like a lot of places Mm-hmm. How about the participation of the industry there in supporting that? Do they have companies working in partnership with universities, like we do here?

Jillian McNichol: 15:29

Yeah, that's a big part of the curriculum, especially at KTIML. I know that Delta mentioned that they really like their graduates because they're well prepared for careers at Delta Electronics, and I know Hanna Semiconductor also works with them as well, and a lot of the local companies do?

Francoise von Trapp: 15:49

Do they have internship programs that they offer or anything like that? I?

Jillian McNichol: 15:52

know that that's a big reason that the Thai Microelectronics Center exists. It's actually a government-funded company that provides sensor innovations and they recruit master's and PhD students to have that real-world experience Right.

Francoise von Trapp: 16:11

So what did you learn about Thailand by visiting the country that you didn't know before you went?

Jillian McNichol: 16:17

I mean, I think most of it is stuff that I didn't know before you went. I mean, I think most of it is stuff that I didn't know before I went. I guess Thailand was never really a country that was top of mind for me in terms of semiconductor industry. It has been a top of mind country for me in terms of tourism. I've been wanting to go to the beaches in Thailand for, you know, as long as I can think of. I was really, you know, inspired and I don't know if impressed is a good word to use but I really enjoyed my time there and I would love to go back at some point.

Francoise von Trapp: 16:52

And you were there for how many days? Seven, a whole seven days, that's pretty good. I mean, when I went to Japan, I was there for two and a half.

Jillian McNichol: 16:58

Well, it took me one day just to get there, and one day to get back.

Francoise von Trapp: 17:04

So yeah, it was worthwhile for you then.

Jillian McNichol: 17:07

Oh yeah, for sure. I mean, I think Thailand is really on the right track. I think they're doing everything right. I think they're doing everything that they need to do. They're aligned, which I think is the biggest thing that alignment between the government and the companies and the schools. That's crucial because even here in Arizona, we've seen how far that alignment can really take this industry. And I think that alignment is so necessary because advancing this is hard. There's so many moving parts, especially, you know, to meet the world's demand for AI, which only gets more aggressive by the day, it feels like. But I do think that the country has a really bright future ahead of it and I'm so excited to see how its industry shapes up over time.

Francoise von Trapp: 17:55

Well, maybe they will have you back for an update. Maybe, That'd be great. Okay, where can people go to learn more?

Jillian McNichol: 18:03

They could visit the Thailand Board of Investment website.

Francoise von Trapp: 18:06

We can put a link to it in the show notes and we'll also put a link to your article. Perfect, yeah, okay, well, thanks for your time. Well, thank you. There's lots more to come, so tune in next time to the 3D Insights Podcast. The 3D Insights Podcast is a production of 3D Insights LLC.