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Analyzing the global semiconductor industry and potential strategies for Thailand
The global semiconductor industry is facing imbalances in supply and demand due to increased demand and disruptions in the supply chain, leading to a potential shift in production facilities to Thailand. Countries are prioritizing domestic production and companies need to embrace change through collaborations, joint ventures, and skills development.
Key Takeaways
- The global semiconductor industry is facing supply and demand imbalances, driven by disruptions in the supply chain and increased demand from countries shifting towards digital economies.
- Many countries, including the US, EU, and China, are prioritizing domestic semiconductor production and securing chip manufacturing to reduce dependence on foreign suppliers.
- Thailand has the potential to become a significant player in the semiconductor industry through the relocation of production facilities and increased investments, but Thai companies must embrace change and strengthen their capabilities to adapt to evolving demands.
- Thailand’s strategic geographical location, coupled with its robust infrastructure and skilled workforce, provides a competitive advantage for the semiconductor industry.
The semiconductor industry is facing challenges due to supply and demand imbalances, driven by increased demand and disruptions in the manufacturing supply chain. This imbalance has been exacerbated by various events such as the China-US trade war, the COVID-19 pandemic, and the Russia-Ukraine dispute.
Future development of Thailand’s semiconductor sector remains challenging, primarily due to technological constraints and substantial investment prerequisites
In focus / Charting the future of the global semiconductor industry and Thailand’s next moves | SCBEIC
Despite the resumption of increased production capacity and output, the market dynamics and the balance between supply and demand still require close monitoring as demand is poised for another surge.
Many countries are prioritizing the securing and strengthening of their domestic semiconductor industry. The US and the EU have enacted the CHIPS Act to boost domestic semiconductor production, while Asian manufacturers are also firm in maintaining their semiconductor production positioning.
SCB EIC anticipates that Thailand’s chip industry has the potential for further advancement as a new global production supply chain takes shape, with several production facilities expected to relocate to Thailand.
However, Thai companies aspiring to be part of the new semiconductor production supply chain must embrace change and implement strategies such as establishing collaborations, seeking joint venture opportunities, strengthening domestic production capabilities, and promoting workforce skills development to align with the future demands in the semiconductor industry.
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