Will PCB companies shift to Southeast Asia?

According to Taiwan media reports, China's Taiwan circuit board industry since 30 years ago from Kunshan, established the cross-Straits industrial chain, established a pivotal global position. Today, faced with the international situation, PCB Taiwan businessmen have to invest in Southeast Asia.

Thailand seems to be the first choice for PCB plant industry transfer. In addition to the Thai Ding-KY (4927), Jingpeng (2355), Jingguo (6108), there are a number of factories actively follow up, a new circuit board settlement, will rise in Thailand. In addition, a number of PCB and upstream major manufacturers continue to plan to build capacity in Southeast Asia. AOI testing equipment factory Mude revealed in an interview, according to its understanding, there have been 10 to 12 company customers to invest in Southeast Asia, the number of Thailand is the most, Vietnam second.

The Taiwanese businessmen who have taken advantage of the early layout will continue to increase investment there. In fact, in the past three years, the Taiwan Circuit Board Association has also organized inspection missions to North Vietnam, Thailand and Indonesia, but at that time, few people showed up.TPCA Association and Taiwan Association of electricity and electricity to Thailand (visit six industrial areas in Thailand) to investigate and evaluate the plant, not only the number of places immediately reported full, and the chairman of the company personally participated in the unprecedented lively.

Why the 180 degree change?

According to industry sources, under the two major variables of China-Us trade friction and China's epidemic containment policy, PCB manufacturers in Taiwan have unprecedented concerns, which makes them to find another production base outside Taiwan and the mainland of China. In order to maintain the integrity of the PCB supply chain, they also agreed that the relocation of industries should be concentrated in close proximity.

2. PCB enterprises in the mainland start to launch the strategic layout of production in the third place

PCB manufacturers in mainland China, which have been rising rapidly in recent years, have obviously felt the demand of customers to decentralize their production bases in the post-epidemic era coupled with geopolitical risks, and have begun to plan or officially launched the strategic layout of production in the third place, and the first choice is also Southeast Asia or India.

Some companies working in Thailand told this network that in recent days, several domestic PCB listed companies took the initiative to visit Thailand, and their investment intentions are also very strong.

Zhongfu Circuit (300814) also announced in the evening of July 29, the company intends to invest in the establishment of a subsidiary in Thailand, the proposed investment amount is not more than 75 million US dollars, the business scope is printed circuit board (PCB) and electronic products design, production and sales services.

Regarding the investment environment in Southeast Asia, Guangdong Circuit Board Industry Association (GPCA) organized a special roundtable forum on November 15, 2022, inviting representatives of digital industry enterprises to share their understanding and perception of the investment environment in Southeast Asia.

At the event, Zhang Peike, chairman of Mingyang Electric Road, said that Mingyang Electric Road is a strategic direction of internationalization, to invest in Southeast Asian countries, is the company's global strategic layout; Wang Xianfeng, general manager of Zhongfu Circuit, pointed out that the investment in Thailand is mainly based on the needs of customers, on the other hand, it is also a response to the country's "Belt and Road" construction needs. Dr. Yun Wenjie of the China Special Economic Zone Research Center at Shenzhen University suggested that enterprises should plan their overseas trade routes in advance, and that the investment fields of overseas factories and domestic factories should not be complementary.

3. Industry giants continue to invest in Southeast Asia

PCB enterprises in Taiwan are not the only ones investing in Southeast Asia; Industry enterprises in mainland China continue to follow up; The author noticed that industry giants from Japan, South Korea, Europe and the United States and other countries and regions have also settled in Southeast Asia in recent years, mainly investing in Thailand, Vietnam, Malaysia and the Philippines.

According to the survey data, Japanese IT companies have shifted their PCB orders to Thailand, and Thai PCB manufacturers are becoming more competitive. Now, in order to face the industrial transformation, the Thai government has put forward the Thai Industry 4.0 policy, hoping to drive industrial upgrading with smart factories, smart cities and smart people, and the PCB industry in Thailand has gradually grown into a scale. BHflex is the 7th largest circuit board factory in Korea and has production bases in Korea, Vietnam and China. Vietnam produces more than 200 million mobile phones, accounting for more than 50% of Samsung's global mobile phone production. Therefore, the upstream and downstream industrial chain of Korean manufacturing industry in Vietnam is complete. It is reported that most of the overseas plants of the Korean soft plate factory are assembled in China, Vietnam and other countries, while BHflex is one of the few plate factories that invest in the full process in Vietnam. Malaysia and the Philippines have also done well as Southeast Asian countries in transferring PCB industries. This year, several more industry giants have made investments in Southeast Asia.