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| Electronic,
Electrical Products and Parts |
Computers
 The
computer industry in Thailand has been an important factor in the
country’s economic growth and industrialization of the past 20 years.
Computers and parts have been Thailand's leading industrial export
since 1985 with the value of computers and parts exported in 1998
reaching US$ 8 billion, amounting to 15 per cent of the country's
total exports for the year. With the exception of 1992 and 1993,
the average rate of growth for computer exports over the past decade
was 20 percent a year.
Thailand's
computer industry can be divided into three major segments: hardware,
software and information service companies. Of the three, only the
hardware segment of the industry is involved in export with the
other two segments mostly producing or importing for domestic consumption,
as local manufacturing and expertise are still limited.
Most
of the manufacturers of computers and parts in Thailand are foreign
companies who receive promotional privileges from the Board of Investment
(BOI). According to the BOI, some 53 manufacturers were granted
promotional status as of 1998, with the stipulation that 80 per
cent of their production must be exported. These incentives have
attracted and benefited primarily multinational companies that use
Thailand as an export base for finished computer parts and their
components.
Exports
of computers and parts in 1999 showed an increase of only two percent
over the previous year, which is low in comparison with recent years.
Computer parts made up about 76 per cent of total value of computer
exports, with the rest consisting of completely built up units.
Major export markets were the US, Singapore and the EU, taking in
28, 27 and 20 percent of the total value of Thailand’s computer
exports respectively.
The
largest constituent of Thailand’s computer and parts industry is
the manufacturing of hard disk drives (HDD) and related components,
accounting for over 68 percent of computer and parts production
value. The hard disk drive industry in Thailand began in 1983 with
Seagate’s investment in head-stack assembly, employing some 50 workers.
Some fifteen years later, the industry has expanded to include around
25 firms engaged in all aspects of the industry’s assembling and
manufacturing activities. The HDD industry accounted for approximately
ten percent of Thailand’s total exports in 1998, earning US$ 5.3
billion.
Thailand
has become one of the world’s important production sites for hard
disk drives and related components, but the country faces significant
competition from Singapore, Malaysia, the Philippines and China.
While American and Japanese companies dominate sales of HDD, over
65 percent of product final assembly is achieved in Southeast Asia
with Singapore having almost 50 percent of the total market.
 The
hard disk drive industry in Thailand revolves around finished assembly
and component manufacturing by three companies, Seagate, IBM and
Fujitsu, along with other supporting companies who exclusively manufacture
components used for production. Thailand offers HDD companies an
inexpensive and relatively experienced labor pool, export oriented
tariff and tax incentives along with close proximity to large Asian
markets and Singapore, where component parts are often shipped for
final assembly.
While
the HDD industry has a solid footing in Thailand, its future as
the country's largest export product is in question. The country
faces strong opposition from Singapore and Malaysia, which have
production bases for disk media and wafer fabrication to support
the industry. This allows the countries to better sustain HDD production,
while increasing the critical mass of local technology companies,
research and development along with engineers to work in conjunction
with the industry. Foreign firms dominate HDD and parts production
in Thailand, with little involvement from indigenous companies.
The lack of quality engineers and R & D activity, combined with
competition from lower labor cost countries, mainly China and the
Philippines, challenges Thailand’s future as a main producer of
HDD products and components.
Similar
to HDD production, multinational companies dominate the remaining
32 percent of computer and parts exports from Thailand. Fujitsu
is the third largest computer and parts exporter and complements
its production of HDD’s with printers and related components. AMD
Thailand has two large facilities north of Bangkok that are involved
in plastic assembly, testing, marking and packing of its logic and
memory products. Delta Electronics has five plants in Thailand producing
components for monitors, stripped down computers, adapters and switching
power supplies. Cal-Comp Corporation is involved in the production
and export of printers and components. Thailand has been unable
to champion any domestic companies to successfully compete in the
global computer and parts market on a large scale.
Thailand
is struggling to meet the demands necessary to compete in the global
computer arena. Incentives offered by the BOI have been successful
in attracting many companies, but they are frequently pressured
to leave for reduced expenses, or in search of higher technology
and better research and development potential. Several recent measures
show that some efforts are being taken to upgrade the operating
environment for the industry and for local firms within it.
The
International Disk Drive Equipment and Materials Association (IDEMA)
has recently set up a Thailand office and is working with representatives
from industry, academia and government to strengthen Thailand’s
HDD industry. Thailand’s pool of engineers should continue to grow
as graduates from new engineering programs at several universities
have recently begun to enter the job market. The Council of Economic
Ministers approved a master plan for the electrical, electronic
and information technology sectors, which addresses many of the
current shortcomings. In all likelihood, the computer and parts
industry in Thailand will be as energetic and dynamic as the industry
is around the world.
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