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Thailand Poised to Become the Main PCB Production Hub Amid Geopolitical Upheaval
Global PCB market revenue will decline by 3.4% in 2023 due to low demand for consumer electronics, reaching around USD 80.5 billion, down from approximately USD 83.3 billion in 2022. However, the industry is expected to rebound, with a potential to reach USD 100 billion by 2027, with a CAGR of 3.7% from 2022~2027, led by automotive PCBs of USD 9.2 billion accounting for the largest part in 2022, and will reach USD 15.6 billion in 2027. TrendForce research shows that China dominates PCB production with a 53% market share in 2023, followed by Taiwan at 13%, Korea at 10%, Japan at 9%, and SEA at 8%.
China’s rising labor costs, environmental regulations, and geopolitical tensions have led to a shift in the PCB supply chain outside of China. SEA, with its labor advantages and free trade benefits, has become a popular destination for PCB manufacturers. TrendForce says that Thailand currently accounts for 50% of the total PCB production value in SEA. Major Taiwanese manufacturers have established factories in Thailand to establish complete industry chains. With an average monthly salary level of $8,800, Thailand is well-positioned to become a key production base for the PCB industry in Southeast Asia.
SEA PCB Production Value to Follow China’s Closely in the Next 10 Years
SEA such as Thailand, Malaysia, and Vietnam have an average manufacturing labor cost of about half of that in China, but their production efficiency is still 20% lower than China’s. In addition, SEA is limited by a shortage of industry talents and incomplete supply chains, resulting in high procurement costs, especially for mid-to-high-level engineering and management personnel. Therefore, large-scale investment in the region is still unlikely at this stage. As the PCB industry chain relocation requires a long time due to its cluster effect, China is expected to remain the world’s largest PCB producer in the next 10 years, accounting for over 40% of the global PCB production value, while SEA is expected to become the 2nd largest producer.
Taiwanese companies are leading the expansion of PCB factories in Southeast Asia.
Taiwanese PCB manufacturers have the highest market share at 34%, but only 38% of their production capacity is located in Taiwan, with the majority around 60% being concentrated in China. To follow the trend of supply chain relocation, 9 Taiwanese PCB manufacturers, including Elite Material, ITEQ, and CCL, plan to establish factories in Thailand, while Chinese manufacturers like Shenzhen Jove Enterprise, and China Eagle Electronic have all set up factories in Thailand. International ones like CMK and Kyoden have also set up factories in Thailand, while TTM, Simmtech, and AT&S focus on Malaysia, and Vector Fabrication has chosen Vietnam.
