Thailand emerges as a focal point for potential gains stemming from the United States’ strategic move to diversify semiconductor production, as highlighted by U.S. Commerce Secretary Gina Raimondo on Wednesday.
Raimondo expressed optimism about American firms’ readiness to amplify investments in the Southeast Asian nation, signaling an opportunity to bolster economic prospects.
The electrical and electronics industry stands as a cornerstone of Thailand’s foreign investment appeal, aligning with the goals of Prime Minister Srettha Thavisin’s administration to invigorate a sluggish economy. Raimondo underscored the precarious concentration of semiconductor production in a handful of nations worldwide, emphasizing the imperative for diversification. She articulated the U.S.’s intent to channel additional investments into countries participating in the Indo-Pacific Economic Framework (IPEF), which includes Thailand among its 14 members.
“We’re all in this together. It benefits everyone, the United States, Thailand, all the IPEF countries, to diversify the supply chain of semiconductor production,” Raimondo asserted during an event in Bangkok, setting the stage for forthcoming discussions with Prime Minister Thavisin.
The “Chips and Science” legislation passed by the U.S. in 2022 earmarks a substantial $52.7 billion for semiconductor production, research, and workforce development. Against this backdrop, Thailand’s semiconductor landscape, primarily dominated by U.S., Japanese, Korean, and Dutch firms, is characterized by a focus on the back-end process, positioning the nation alongside counterparts like Vietnam and India.
A 2023 report by Siam Commercial Bank shed light on the evolving dynamics of global manufacturing supply chains, attributing Thailand’s attractiveness for semiconductor production facility relocations to geopolitical tensions. The Board of Investment in Thailand has further sweetened the deal by offering incentives such as tax breaks and duty exemptions to entice investments into the semiconductor sector.
“As U.S. multinationals look to diversify their supply chains, Thailand is increasingly a place that comes to the top of the list,” affirmed Raimondo, underlining the country’s growing prominence in the global semiconductor landscape.
Raimondo’s visit to the Philippines earlier in the week witnessed revelations of U.S. companies poised to unveil investments surpassing $1 billion in the nation, a staunch ally of the United States. These investments, spanning domains such as solar energy, electric vehicles, and digitization, underscore the broader strategic engagements unfolding across the Indo-Pacific region.