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Only from importer of electronic products for distribution in the Kingdom 30 years ago, Thailand has now became manufacturer itself for electronic worldwide’s export. Since 1961, the government has given a strong support for investment on electronic industry but only for home appliances products like electric fans, refrigerator which do not use a high production technology. The industry has been gradually developed. The country is able to produce some electronic parts for example compressor of air conditionning, transformer in television. Later on, with the joint venture investment between Thai manufacturers and foreign investors from developing countries like Japan, South Korea, the United States, Singapore and Taiwan, which brought a know-how and high technology to Thai electronic industry, Thailand can produce electronic circuit board, printing circuit board, electronic bearing and other electronic components, and then export to investors’ countries. The export value of this sector has successfully increased each year : from Baht 226 billion in 1993 to Baht 451 billion in 1996 which recorded an increase of 26%.

Since 1992, export of computers, peripherals and electronic components have grown on average of 48.7% and integrated circuits grew 27%. Electronic products replaced garments as Thailand’s top export. In 1997, the electronic industry brought Baht 517 Billion which was an increase of 14.4% compared to 1996. The major customers are the United States, EC countries, Japan and Singapore.

At present, due to the increase of labour wage in Thailand, foreign investors are now looking for other production sources like China and Indochina countries who still have a low cost of labour force. This situation has necessitated a big development on technology for Thai electronic industry sector. The government has therefore issued a five-year development plan for electronic products which will be effective from January 1^st 1996 until December 31^st 2000.

According to this development plan, there are five major products to be developed :

• Electric circuit and ultra filtre industry
• Software and circuit board design
• Telecommunication : telephone network
• Multimedia equipment, television, computers
• Electronic components and home automation equipments

With the following strategies :

• Free trade zone ; no tax or customs procedure
• Reinfocing research and development on electronic products
• Human resources development (foreign experts, training)
• Tax structure adjustment
• Quality control system improvement

The weak point of Thai electronic industry which Thai government has to take into consideration and resolve the problem as soon as feasible is the import tax rate. For electronic sector, the import tax rate for raw materials, ready-made products is an average of 5-35% and the tax rate for electronic particles is higher than ready-made products, resulting from supporting of the government on local manufacturing. In 1994, Thai government and the Customs House modified the import tax rate in accordance to the tax decrease agreement of AFTA. However, the import tax rate is still high: 5-20% compared to ASEAN countries at 0-5%. Nevertheless, due to the free trade on world’s communication of which Thailand became a member, the country expects to re-adjust the tax rate by decreasing to 0-5% within year 2000.

Regarding the product itself, Thailand has a great potential on increasing production efficiency. Presently, some local electronic products are already competitive to ASEAN countries products for example printing circuit board for electonic markets in the United States, RCA (the Revealed Comparative Advantage Index) value of Thailand was increased to 2.354 in 1996 while Singapore has an RCA value decrease to 1.773. For European market, Thailand’s RCA value increased to 3.725 in 1996 while RCA value of Singapore and Malaysie decreased to 2.432 and 1.06 respectively.

Concerning diod, transistor and electronic component for EC market, RCA value of Thailand is positive and increased gradually while ASEAN competitve countries lie Singapore, Malaysia and the Philippines possess a negative RCA value

For other products like magnetic tape and disks for EC market, computer and assembly parts for USA, EC and Japan markts, Thailand as well as Singapore, Malaysia and Indonesia have approximately the same RCA value change.

Electronic home appliances which could be very competitve after the adjustment of AFTA tax rate are air conditionning, refrigerator, rice cooker and electric fan. Electronic parts to be competitive with ASEAN group is evaporator. Electronic appliance that could not be competitive in the market is washing machine. Non-competitive assembly parts are compresor for refrigerator, motor for air-conditionning and motor for washing machine.

For electronic industry sector as well as other main local industries, Thailand offers different advantages in many forms for factories located in different industrial areas of the States which are The Industrial estates of Estate of Thailand, The BOI (Board of Investment) zone, Industrial areas of Industry Department.

Most of electronic manufacturers in Thailand are located in zone 2 of BOI Zone, which covers the areas of Chachernsao, Ayudhaya, Saraburi provinces. Some are found in Laem Chabang Industrial Estate while small factories are widely located around Bangkok, Pathumthani, Samutprakarn and Lampoon provinces.

Thai electronic industry became now a new target product of the country. It has already brought a good revenue to Thailand and will continue successfully not only because of its great demand in the worldwide market but also of its ready-to-become world standard with high efficiency quality product.

Préparé par Mr. Hervé Mouly
Managing Director FEE

Dernière modification le 03 April 2000

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