The SCB EIC assesses that the global demand for AI is increasing rapidly, benefiting chip manufacturers and components excluding chips. The advantages will accrue to Thai operators in two main aspects:
Exports: Thailand has the potential to continuously export chips and computer components to the United States as the US reduces imports from China and leads in AI. By 2024, it is projected that Thailand will export 83% of all chips to the US and around 40% of computer components.
Investments: The technology war between China and the US has led to investment expansion into ASEAN and Thailand. In 2023, Thailand received investments in the E&E industry and large projects such as wafer production, chip assembly and testing, and data sensor and cloud business valued at over 167.989 billion baht.
However, Thailand faces challenges in developing high-value-added products to support AI technology, resulting in a smaller market share compared to competitors. The US imports only 7% of chips from Thailand compared to Malaysia’s 17%.
The main obstacles for Thailand include an incomplete supply chain, lack of original chips, insufficient research and innovation, and digital and technology skills shortages that are crucial factors that need to be addressed to increase competitiveness against rival countries.
SCB EIC recommends that Thailand accelerate research, develop high-value-added products, and expand investment in high-tech products, particularly in advanced chip manufacturing, computer hardware-software AI, and data storage devices.
Furthermore, Thailand should expedite the development of digital skills, especially in semiconductor engineers and computer science experts who are currently in short supply.
On the government side, efforts should be directed towards building digital infrastructure and high-speed internet to attract investments from big tech companies and push for green industries that are environmentally friendly to position Thailand as a tech hub in ASEAN and meet sustainable future demands.
Source: SCB EIC
TLDR: The global AI demand growth presents opportunities for Thai chip manufacturers and component exporters to the US, but challenges remain in developing high-value products and digital skills to compete effectively against rivals. Recommendations include accelerating research, investing in high-tech products, and building digital infrastructure to attract investments and position Thailand as a tech hub in ASEAN.
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