Column: Looking to Asia

When it comes to PCB investment, Thailand is the hottest spot on earth right now. With 23 new PCB plants currently under construction or already in production, the country is destined to become Southeast Asia's PCB manufacturing hub. For this reason, Dr. Hayao Nakahara has written a summary report on the new investors in Thailand - many of whom are PCB manufacturers from Taiwan and China.

1. introduction

The author visited Thailand for the first time about 40 years ago. He remembers little of that trip, except for a brief visit to a local PCB manufacturer: KCE (Konchoron Electronics). KCE was the first company in Thailand to manufacture through-hole printed circuit boards (PTH), at that time only double-sided printed circuit boards (DSB). Compared to the PCB factories the author knew from the USA and Japan, KCE was primitive. The author doubted the future of KCE. His assessment was completely wrong. Today, KCE is a thriving PCB manufacturer known for its PCBs for the automotive industry. Its PCB production amounted to USD 417 million in 2023, down 11.1% from USD 469 million in 2022, calculated at an average exchange rate of 34.77 Thai Baht/USD in 2023. Officially, KCE is called 'KCE Electronics Co, Lt.'. Several divisions of the company produce printed circuit boards, one subsidiary produces laminates (Thai Laminate Co, Lt), one produces chemicals, etc.. More information can be found on the website www.kce.co.th.

Since the first visit, the author has visited Thailand several times to visit a dozen PCB manufacturers that started operations in the late 1990s: Mektec Thailand, Fujikura Thailand, CMK Thailand, Kyoden Thailand, Seika-YKC (acquired by German STARTEAM Global, see PLUS 11/2023, p. 1447 ff.) and Canon Components - all from Japan -; APEX International, Draco PCB (now China Poon) and APBC from Taiwan; and Elek & Eltec Thailand (now Kingboard Chemical Thailand). The author also visited Thai Laminate, Kingboard Chemical (the former CCL subsidiary of Elek & Eltek) and Matsushita Denko (now Panasonic).

Picture: Snengyi Technology

Uotsuri-shima ( 魚釣島) is the largest of the uninhabited Senkaku IslandsUntiltwo years ago, to the author's knowledge, no new PCB manufacturers were investing in Thailand, although there were some expansions by APEX International and CMK. Now, as readers are probably already aware, there are 'suddenly' almost 30 manufacturers, all from Taiwan and China, who have come and are coming to Thailand to build new PCB plants. If you go through announced investments in Thailand, they all mention 'China+1'. Due to the supply chain disruption caused by the COVID-19 pandemic and the fear of too much concentration of PCB production in China, buyers of Chinese-made PCBs have started to worry about a singular source (China). This is exacerbated by the geopolitical issues between the US and China. Interestingly, Japanese PCB manufacturers are the first to 'leave' China and make new investments in Southeast Asia, especially in Vietnam and Thailand, after disputes arose between Japan and China over the ownership of the 'Senkaku Islands' (known in China as the Diaoyutai Islands). The disputes are still ongoing. Japanese factories in China have been attacked and some even destroyed. With one exception - Mektec - further investment in China has been halted. All Japanese PCB manufacturers operating in China decided to maintain their Chinese operations with very little investment and set up new factories in Southeast Asia and some in Japan. I guess you could call this 'onshoring'. The Japanese refer to these decisions as risk avoidance: "Don't put all your eggs in one basket."

Sumitomo Electric Industry sold its FPC plant in Shenzhen a few years ago and Ibiden sold its HDI plant in Beijing to 'China Guangzhou Fast Print'.

In this quarterly report, we will report on new PCB investments in China. TPCA, HKPCA and the newly founded Thailand Printed Circuit Association held several seminars and trade fairs in Bangkok last year and will organize another trade fair in Bangkok next July.

2nd Kingdom of Thailand

According to Thai statistics, the country's population will be around 72 million in 2023, with 12.5 million or 17.4% living in Bangkok. Thailand borders Myanmar to the west, Laos to the east, Cambodia to the southeast and Malaysia to the south.

New PCB investments seem to be concentrated in four areas in Thailand: north of Bangkok such as Ayutthaya, east of Bangkok such as Prachinburi (about 150 km from Bangkok), southeast of Bangkok (near Suvarnabumi airport) and the area at the southern tip, Rayong.

Existing manufacturers: KCE has plants in Lat Krabang near the airport and in the high-tech industrial park in Ayutthaya, Mektec and Fujikura are also in Ayutthaya, Kingboard Chemical (Elek & Eltec), APCB and Chin Poon are in Pathumthani, Kyoden has a plant in Chonburi, south of the airport, and APEX is located in Sumutsakorn, southwest of Bangkok.

There are some errors in the labels of the above maps (A and B). For example, SCC (深南) is building in Rojana Industrial Park in Prachinburi. JOVE (中富) and Shifui Fushi (四海富士) are located in Rayong.

Japan's automotive industry 'cultivated' the Thai car industry and brought all major suppliers to Thailand. Honda has a production plant in Ayutthaya. In 2011, Thailand experienced a massive flood in Bangkok and the north of the city. The author visited Thailand three months after the floods. In Chin Poon, the water level at the plant rose to 2.3 meters. Fujikura was completely under water. The Panasonic CCL factory was flooded. After the water had drained away, a dozen cobra snakes were found in the factory. Reconstruction was delayed by two weeks because the company had to ensure that no more cobras were hiding.

More than 1,000 new cars from the Honda plant were also submerged. The Thais thought that Honda would repair and sell these cars. However, Honda scrapped all of them, which strengthened the Thai people's confidence in Honda. Later, Honda built a new factory in Rojana Industrial Park in Prachinburi, which is clearly visible on Route 34 just west of Industrial Estate 304. The Japanese government provided a huge sum of money to reinforce the wall to a height of 4.8 meters, which runs 70 km around Ayutthaya.

Industrial estate 304 in Prachinburi

Probably more than 50% of the PCBs produced in Thailand went to the automotive industry. Now Chinese car manufacturers such as BYD, South Korean car manufacturers such as Hyundai/Kia and some European manufacturers such as Mercedes-Benz and even Tesla are coming to Thailand. So it is not surprising that most of the new PCB factories are targeting the automotive sector. Some will produce motherboards for PCs, servers and even low-orbit satellites.

3 New PCB factories

Table 1 was compiled by the author based on available information. However, some of the reported figures are very opaque when it comes to the level of investment. For example, one manufacturer reported an investment of only $45 million in Thailand. Later it turned out that this figure was only for the purchase of land.

If a company states an investment of $300 million, for example, this probably refers to the next few years. Some producers emphasize that their investment is only for phase 1, which means that many more billions of dollars will follow.

If the stated investments are true and the manufacturers who do not state an investment amount are not taken into account, the total committed investments amount to around $3 billion. If all these investments fully materialize, additional production in Thailand should increase by $3 billion, assuming a 1:1 investment turnaround. If this is the case, PCB production in Thailand could reach $6 billion or more per year in three to four years (currently it is just over $3 billion).

Almost all investors indicate that automotive applications are the top priority, followed by motherboards for PCs and servers, and some for satellite communications. As Thailand is the Southeast Asian hub for automotive production, the corresponding focus is understandable.

Taiwanese and Chinese laminate manufacturers are following their customers and building CCL plants in Thailand: TUC, ITEC, Taiflex, Shengyi Technology, Shanghai Nanya, etc. EMC is building a CCL plant in Malaysia. Some equipment manufacturers may follow the CCL manufacturers and set up manufacturing plants in Thailand, initially as service centers. Existing PCB manufacturers welcome this move.

(N.T. Information Ltd, Nov 2023)

4. Taiwanese manufacturers

4.1 Gold Circuit Electronics, GCE (revenue 2023: $965 million, year-on-year -8.4 %)

GCE has started construction of a new plant in Prachinburi province, although no specific industrial area is indicated, targeting mainly the server board market. GCE has apparently purchased a plot of land for around USD 40 million.

4.2 Compeq (revenue 2023: USD 2.143 million, year-on-year -12.2 %)

Compeq, one of the largest HDI PCB manufacturers in the world, is building a plant in Chachoengsao province near Sumutsakhorn International Airport.

Commissioning is planned for the fourth quarter of 2024. Applications in the field of near-earth satellite communication are targeted. In 2023, around 9% of the revenue of USD 2,143 million will be attributable to printed circuit boards supplied to StarLink, i.e. around USD 195 million. Compeq's share of this business continues to grow. Another major customer is Apple.

4.3 Unimicron (revenue 2023: $3,340 million, year-on-year decline of 26%)

Unimicron is the world's largest manufacturer of IC substrates with an estimated turnover of USD 2.2 billion in this market.

The new plant is located in the province of Chachoengsao, not far from Compeq's main site. Among other things, the aim is to manufacture printed circuit boards for low-orbit satellite communications. Similar to Compeq, the Thai plant is scheduled to go into operation in the fourth quarter of 2024.

Printed circuit boards for satellite communication are also targeted by the Thai investments

4.4 Zhen Ding Technology, ZDT (revenue 2023: USD 4.865 million, year-on-year decline of 11.6%)

ZDT is one of the few Taiwanese PCB manufacturers to further expand its operations in China. The company is investing more than $1 billion over the next five years to expand its IC substrate business in China. The Thai plant will be built in the SAHA Industrial Park in Prachinburi province with a Thai minority partner, Saha Pathana Inte-Holding PCL (SPI) (9% share, ZDT holds 91% of this joint venture).

The site is very large, approximately 410,000^m2. The investment in Phase 1 is expected to amount to 10 billion baht (approximately $290 million). There is no information yet on the products that ZDT Thailand will manufacture.

4.5 Unitech (revenue 2023: USD 480 million, -14.1 % year-on-year)

Unitech tried to buy another Taiwanese manufacturer, APCB Thailand, but negotiations fell through.

What happened after that is not known to the author.

4.6 Dynamic Electronics revenue 2023: $505 million, year-on-year +2.7 %)

Dynamic Electronics' plant in Thailand is located in industrial estate 304 in the province of Prachinburi. CMK has been operating in the same industrial park since early 2000 and has recently completed the expansion of the plant with a new factory next to the existing plant. STARTeam Global, a former German PCB distributor (CML) that entered the PCB manufacturing business in China, purchased SEIKA-YKC, a Japanese PCB manufacturer (which also ceased operations). Industrial Zone 304 is home to several Japanese manufacturers of components for the automotive industry.

Dynamic purchased 200,000^m2 of land and is rumored to be investing tens of millions of dollars over the next five to six years. The target markets are multilayer boards with a high number of layers for servers and AI servers. The secondary market is HDI production for the automotive industry. Operations are scheduled to start at the end of 2024. Such a large investment in Thailand could foreshadow the imminent closure of the Kunshan plant. Dynamic has recently been listed on the Shanghai Stock Exchange and has been listed on the Taiwan Stock Exchange for many years.

4.7 APEX International (revenue 2023: USD 405 million, year-on-year -15.3 %)

APEX has two factories in the Sinsakorn Industrial Estate: APEX I and APEX II. Last year, a new factory building was built on the APEX II campus, the third production facility on this site. For many years, the company's main products were set-top boxes. Now the company is targeting the automotive market.

4.8 Chin Poon Industrial (revenue 2023: $538 million, year-on-year -4.7 %)

Chin Poon built a Thai plant called Draco PCB together with a Thai partner (the family business VITEL) in 1989. Chin Poon owned 49 % of the shares and VITEL 30 %. A few years ago, Chin Poon increased its stake in Draco PCB to 100% and changed the name to Chin Poon Thailand. About 80% of Chin Poon's business is in the automotive PCB sector. Chin Poon strengthened its existing plant in Bangkadi Industrial Park in Pathumthani province, 45 minutes north of Bangkok. Draco PCB produces single-sided PCBs and PCBs with silver through-hole plating on an area of 200,000^m2 per month. In 2011, Draco built a plant for double-sided PCBs and in 2015 a plant for multilayer PCBs. Chin Poon Thailand expanded these double-sided and multilayer PCB manufacturing facilities.

4.9 WUS (currently unconfirmed)

WUS is one of the first investors in Thailand among a dozen Taiwanese PCB manufacturers. The company is initially investing $280 million

in the construction of a plant in Ayutthaya, the ancient capital of Thailand, where more than 3,000 Japanese lived 400 years ago. One of them became Prime Minister of the Kingdom of Ayutthaya, but he was poisoned because he became so powerful. WUS is one of the world's leading manufacturers of high layer count multilayer PCBs, alongside TTM Technologies, Shennan Circuits, Gold Circuits, Shengyi Electronics, Isu-Petasys, etc. Of course, WUS targets high layer count multilayer PCBs for servers, AI servers, network equipment, etc. It is scheduled to start operation between the fourth quarter of 2024 to the first quarter of 2025.

4.10 Nan Ya PCB (revenue 2023, USD 1.356 million, year-on-year -34.6%)

Nan Ya is considering investments in Thailand, but no concrete information is available at the time of writing. Nan Ya was hit hard in 2023 because 80% of its main revenue came from ICS, but semiconductor production declined. The company is now in a strong recovery mode and other major Taiwanese PCB manufacturers are investing in Vietnam (Tripod and T.P.T.) and Malaysia (GBM and Kinsus are considering an ICS plant in Malaysia).

5 Chinese PCB manufacturers

The announcements of some Chinese investors are somewhat
vague. Each time new news is announced, different figures are given.

5.1 Aohong Electronics (澳弘電子)

Aohong is based in the city of Changzhou in Jiangsu province. The company has two production facilities in China. Aohong Electronics and Haihong Electronics. The annual production capacity is stated as 4,000,000^m2.

Aohong is investing about $85 million in Jinchi-Borthong Ind. estate in Prachinburi province. The company is mainly targeting applications in the automotive industry (IATF16949 certified in China). The production capacity of phase 1 is expected to be 1,200,000^m2 per year for double-sided and multilayer panels.

Jinchi (金地) is a Chinese name for Borthong (Thai name). The city is located about 150 km east of Bangkok.

5.2 JOVE Enterprise (中富電子)

This is the first Chinese PCB manufacturer to announce an investment in Thailand. Its Thai name is WTT (for Wang Thailand Technology). Three of the founders of JOVE are named Wang, but are not related. In the company's announcement, Terry Tong, a former employee of AT&S and VGT and one-time founder, is named as Vice President of the Thai subsidiary. The plant in Rayong is scheduled to go into operation in August 2024.

The plant is located in the Thai-China Industrial Zone.

The WTT site has a size of 80,000^m2. The plant in Thailand is scheduled to start operations in August 2024, with a capacity of approximately 1,200,000 m2 of PCBs per year - HL multilayer boards with HDI capability, FPC and rigid-flex PCBs. JOVE has five PCB production plants in China. Rayong is a city on the southern tip of Thailand.

Japanese companies Mitsubishi Gas Chemical (CCL based in BT) and Sagami PCI (Thailand), which provide drilling services, have been operating in Rayong Industrial Park for many years.

5.3 Sifui Fushi (四会富士)

Sifui Fushi was founded in Shenzhen in 2009 as a joint venture between a Chinese company and the Japanese printed circuit board manufacturer Fuji Print. In 2020, Sifui Fushi went public, and before the IPO, Fuji Print sold its entire stake to its Chinese partner. Sifui's most important customers (70%) are Japanese electronics companies, primarily manufacturers of automotive parts. In 2021, 60% of printed circuit boards were sold for the industrial control sector and 20% for the automotive industry. The automotive industry's share of its business is increasing.

The Thai plant is located in the Amata Industrial Park in Rayong province. The company said it is investing about RMB 500 million ($75 million) to build a plant in Thailand to "cope with the changes in international trade patterns and other unfavorable factors". The plant is expected to be operational in early 2025.

5.4 Aoshikan, ASK PCB (奥士康)

ASK PCB invested around $150 million in the construction of a plant on a 93,000^m2 site in Ayutthaya (大城府 in Chinese). The plant will be built in two phases. Phase 1 is scheduled to go into operation in 2024 with a capacity of 240,000^m2 per month for applications in automotive and consumer electronics with multilayer boards with an average of 5 layers. Phase 2 is scheduled to go into operation in 2025 with a capacity of 120,000 m2 per month for communication devices. The expected average number of layers in phase 2 is set at twelve layers.

The Thai subsidiary is named SUNDELL Industry (森徳科技). ASK PCB is known as the first Chinese PCB manufacturer to handle large boards (600 mm x 900 mm).

5.5 Zhongjing Electronics (中京電子) aka China Eagle Electronics, CEE

The author had the opportunity to visit the new plant in Zhuhai last December. The company is also building a new plant for ICS in Zhuhai.

The Thai subsidiary is being built in the Rojana Industrial Park with an investment of around 80 million dollars on an area of around 100,000^m2. The aim is to develop applications in the automotive, computer and electrical appliance sectors. Commissioning is planned for 2025 (an exact date is not given).

5.6 Founder PCB (方正科技)

The Thai subsidiary is called IFOUNDER PCB. The $130 million investment in the Rojana Industrial Park in Prachinburi (unlike the Rojana Industrial Park in Ayutthaya) covers an area of 80,000^m2.

The main focus is on automotive and consumer electronics. Commissioning is scheduled for the first quarter of 2025.

5.7 Guanghe Technology (広合科技) alias Delton.

The company is investing $180 million in the construction of a 105,000^m2 plant in the Jinchi-Borthong 33 industrial estate in Prachinburi.

The target markets are automotive electronics, PC motherboards, AI servers, etc. No specific information is available on production capacity. Delton produces multilayer boards with a high number of layers of up to 32 layers for server applications. The company originates from Guangdai Electronics, which belongs to the Taiwanese Nanya Plastic Group.

5.8 Shennan Circuits, SCC (深南電路)

Shennan needs no special introduction. The company is known for one of the best PCB technologies in China. The company is investing around $180 million in the construction of a PCB plant in the Rojana Industrial Park.

5.9 Kinwong Electronics (景旺電子)

The author visited the new plant in Zhuhai last December. The company is initially investing $100 million to build a plant in the TFD Industrial Park in the Banpakong District of Chachaoengsao Province near Suvarnabumi International Airport (see Compeq and Umimicron). No exact date has been set for commissioning. It will probably start sometime in 2025.

Golden Dragon at Suvarnabumi Airport in Bankok

5.10 Shengyi Electronics (生益電子)

Shengyi is investing USD 100 million in a Thai plant in the TFD Industrial Park(www.tfd-factory.com) with an area of 80,000^m2. Commissioning is scheduled for 2025.

5.11 Jiangxi Welgao (江西威尓電子)

Welgao is a relatively new PCB manufacturer founded in April 2017 in Ji'An, Jiangxi Province. The company manufactures PCBs for mini LEDs, flat transformers, industrial controls, displays, consumer electronics and automotive electronics. At the time of writing this article about Welgao, the only known information is that the Thai plant is being built in the Rojana Industrial Park in Ayutthaya. The author is convinced that more Chinese manufacturers will come to Thailand.

6 Other manufacturers

6.1 STARTeam Global

As mentioned above, STARTeam has purchased the former SEIKA-YKC in Industrial Estate 304 in Prachinburi Province. SEIKA-YKC ceased operations three years ago. STARTeam purchased twelve SCHMOLL drilling machines, all with six spindles and a speed of 200 KRPM, six of which have reverse drilling capability._{CO2 laser drilling machines} from Han's Laser and wet machining equipment from UCE were also installed.

6.2 KCE Electronics

KCE was briefly mentioned - the largest local PCB manufacturer in Thailand. The new plant in Ayutthaya is located on the site of Sanyo Electric, which has ceased operations. The scale of the new KCE plant is not yet known.

6.3 CMK Corporation

CMK has been operating in Industrial Estate 304 for many years. In 2023, the construction of the Phase 2 plant next to the Phase 1 plant was started. The total site area is 100,000^m2. Phase 1 is a two-storey building with a production area of 50,000^m2. Phase 2 also has an area of 50,000^m2. The Phase 2 plant has four times the HDI capacity of the Phase 1 plant. CMK has acquired an additional 100,000^m2 of land in Industrial Estate 304 for future expansion.

7.0 Future of Thailand PCB Industry

With 23 new PCB plants currently under construction, some of which are already in operation, Thailand is destined to become Southeast Asia's center of PCB production. A major challenge here is finding sufficient staff. Thailand has a sufficient labor force, but all the new factories have to be patient in training their employees.

Current production output is already greater than in North America, let alone Europe. While the production output in North America shows a negligible increase, the production output in Thailand will more than double in a very short time with investments of more than $3 billion. You don't have to be a rocket scientist to understand what will happen in Thailand.
Translation: mh

Weblinks

Thailand Printed Association: www.thpca.org (Retrieved: 11.3.2024).
Commercial area 304 in Prachinburi:
www.304industrialpark.com (Retrieved: 11.3.2024).
www.rojanaindustrialpark.com
http://estate.nikkan.co.jp