The Thai electronics industry took off in the 1980s with Japanese investment in television and stereo production. Today, Thailand is a world leader in the manufacturing of hard disk drives (HDD), digital office equipment, air conditioners, televisions and other household appliances. Three out of the country’s top five exports in 2004 were electronics products and the vibrant integrated circuits (IC), packaging and testing industry is growing rapidly.

Thailand is now focusing on developing its information communication technology (ICT) sector. The country’s success is evident. Between 2003 and 2004, the software and hardware industries grew by 14% and 19% respectively, with software revenue totalling $899m and the hardware industry yielding $1.68bn. Further, Thailand is well-positioned industrially and logistically to become the regional base for ‘just-in-time’ electrical and electronics manufacturing.

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Thailand is the world’s largest hard disk drive producer, with four out of five of the world’s leading HDD manufacturers having established production bases in Thailand (specifically Seagate, Hitachi Global Storage Technology, Western Digital and Fujitsu). Forecasts indicate that Thailand’s HDD world market share will hit 42% for 2005, an astounding increase from 19.9% in 2004. As the world leader in HDD technology, Seagate cites the availability of skilled Thai workers as a top reason for locating in Thailand.

The global HDD industry projects an annual growth rate of 17%, from 261 million units in 2003 to 500 million in 2010. Thailand is forecast to produce 147 million HDD in 2005, up from 72 million in 2004. In 2004, exports of hard disk drives grew by 86.5%, accounting for 12.3% of the country’s exports. Cluster development facilitates domestic production of many components, including spindle motors, suspensions and tooling/heat treatment systems.

Software industry

Added to its electronics profile, the software industry in Thailand has been established for 35 years and is worth more than $700m, growing at 23% annually. But the industry is still not sufficient to meet domestic demand. Though Thailand exports $32m worth of software each year, it still imports 70% of its products. This means there are many investment opportunities in this sector, particularly in multimedia, business solutions, animation and telecom software for mobile phones.

Currently, Thailand is home to more than 600 local software companies, employing 40,000 professionals, and Microsoft recently donated $2.8m partly to train more Thai software developers. Investment in the industry increased 126% from $3.15m in 2002 to $7.125m in 2003.

Reuters Software, an early entrant, located a regional software development centre in Thailand, which is now the country’s largest such centre. With a wide selection of graduates and skilled professionals, Reuters’ Thailand centre was its first to attain CMMI Level 5 certification, an internationally accepted standard for software outsourcing organisations.

Why invest here?

Among its many advantages, Thailand offers competitive labour costs, a sufficient pool of available labour, high productivity levels, and excellent logistics and transportation infrastructure (including a new airport in Bangkok due to open in 2006) and low overheads. Thailand is very open to foreign investment and major incentives are available, particularly in the electronics and ICT sectors.

The rules do not favour or discriminate and the cost of setting up a business in Thailand is relatively low. According to Mercer HR Consulting, Bangkok consistently ranks as one the least expensive cities in Asia, and the World Bank’s Doing Business in 2006 report ranks Thailand as the number one developing country for ease of doing business.

Start your own success story now!

The Thai government, through the Board of Investment, offers the most attractive customised investment packages for long-term investment projects in the electronic sector.

For a detailed explanation of BOI incentives for investment in Thailand’s dynamic electronic sector, visit

www.boi.go.th