5G in Thailand Drives Growth of Electronics Industry

According to the GSMA, 5G technology will account for 14% of the total communications market by 2025. The ratio of such coverage in Thailand will increase to 23% which is above average in Asia-Pacific. This is a welcoming development because it helps boost continuous growth for the electronics industry.

An analysis from Krungsri Research indicates that Thailand's electronics industry will rebound in 2021-2023 following the recovery of the global economy as well as the development and production of electronic devices to support 5G technology. In 2020, Thailand was the first country in ASEAN to provide commercial 5G services while the government endorsed the investment in the development of 5G infrastructure in the Eastern Economic Corridor (EEC). This area is home to an industrial and digital innovation promotion and is intended to be a center of trade, industrial investment and regional digital innovation to lead the country towards becoming a fully digital economic society.

 

In addition, the rise of Internet of Things (IoT) and smart devices have resulted in strong demand for printed circuit boards and high-capacity hard disk drives due to the increasing demand for cloud computing and data centers. At the same time, the demand for everyday IT products such as smartphones, personal computers, laptops and tablets are also on the rise as a result of the work-from-home policy by various private corporates and public organizations, as well as online learning policy by educational institutions of all levels during the COVID-19 pandemic.

These positive factors have contributed to the decision by world-class IT company such as Apple to establish production bases in Thailand. According to a report from MacThai, most of the job openings this year are in the Operations and Supply Chain Department. This reflects Apple’s need for a team in Thailand to oversee the production and coordinating with various factories while formerly these were positions only available in China or locations where Apple has their plants established. It should also be noted that the new iMac M1 has a label “Design by Apple in California, Made in Thailand” shown at the bottom, so this fact is consistent with this report.

Thailand’s electronics industry is mainly export-oriented, accounting for 90-95% of the total production in the country. The number of major manufacturers account for 31% of the total number of manufacturers, with the majority being multinational companies and big joint ventures such as Canon, Hi-Tech, Western Digital, Toshiba Semiconductor and Seagate Technology. There are also some famous large Thai companies in this camp who have high expertise and experience including SVI, Thanin, Elna and KCE International.

However, although Thailand is the world’s 13th largest electronics manufacturing base, it has a market share of only 1.8% of the world's total electronic export value. This is due to the fact that most of the operators in Thailand are just subcontractors because Thai SMEs still lack knowhow and sufficient investment to develop their own technologies. Close collaboration between Thai operators and foreign companies who possess knowhow will truly help empower electronics SMEs in Thailand to be able to advance with sustainability.

At any rate, investment in 5G development in Thailand by multinational companies not only benefits just the Thai electronics industry, it also offers an important turning point for other industries such as the medical industry. For example, the world's 5G giant from China Huawei has signed MOU with the Faculty of Medicine Ramathibodi Hospital, Mahidol University to support the application of various leading technologies such as 5G, cloud and artificial intelligence to help transform the hospital into a fully smart hospital with the ability to track patients, collect and analyze data, telemedicine, remote surgery diagnosis, and many other useful applications.

Another outstanding foreign operator is ZTE Corporation, a giant global solution provider of telecommunication and mobile internet technology from China. ZTE Corporation has introduced a smart factory management service platform for the development of sustainable industrial estates. An interesting use case emerged during the need to keep social distancing as a result of Covid-19 as ZTE enabled 5G with HD video and Augmented Reality (AR) to help field personnel carry out their duty with long distance support. The other useful applications include design, manufacturing, inspection, maintenance, brainstorming and training. What’s more, this remote technology helps cut down cost substantially because it reduces the need to hire specialists by more than 30%. For example, one 5G security patrol robot can replace 3-4 security guards, and can transmit 360-degree visual report in 4K resolution and can maneuver itself around obstacles automatically.

Major Thai operators outside the electronics industry are also actively adopting 5G technology. For example, AIS is collaborating with SCG and Prince of Songkla University to develop an unmanned prototype forklift in SCG factory in Saraburi that can be controlled remotely via 5G network from SCG Headquarters in Bangkok. The forklift can be controlled to move items from one point to another with precision in real time, which helps enable the businesses to move on to perform remote employee training and increasing work safety. This can be a model for various industries to study and adopt for their own use.  

 

Unfortunately, the rise of 5G in Thailand is disrupted by the global shortage of chips or semiconductors which has become a major problem in the electronics industry. Although many research centers have speculated that the situation has already improved since operators in many countries have begun to increase production capacity while China, Taiwan, Japan and the USA have endorsed investments in chip production to cope with the crisis in early 2021, JPMorgan disagreed and forecast that the global chip shortage is likely to continue until 2022 especially in the first half of the year. However, the situation will likely improve in the latter half as factories around the world start resuming their full production capacity.

If you are interested to learn more about the development of 5G, digital and electronics industry as well as other interesting stories in the industrial world, don’t miss the next ME Blog and join NEPCON Thailand 2022, ASEAN’s #1 exhibition on assembly, measurement and testing technologies for electronics manufacturing during 22-25 June 2022 at BITEC, Bangkok.