Electronics Industry

Slide1: 

THAILAND INVESTMENT OPPORTUNITIES IN ELECTRICAL & ELECTRONICS October 2005

E&E World Position: 

E&E World Position E&E exports: > US$33 billion in 2004, 1/3 of Thailand’s total World’s largest HDD producer in 2005 #1 in Microwaves; #2 in faxes Major production: IC packaging A/Cs, TVs Cameras Washing machines Computers & accessories Strong supporting industries Compressors Motors Plastic & metal parts Synergies with auto industry - #1 in ASEAN Major manufacturers diversifying away from China 27 million cell phones in 2003, increasing 6 million/yr

Diverse Industries, Opportunities: 

Diverse Industries, Opportunities Source: Thai Customs, 2004

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Source: Thai Customs Electronics were 33.8% of total 2004 exports 1 AUD = 30 THB Major Trading & Production Hub For Diverse Industries

Thailand’s E&E Exports 2004: 

Thailand’s E&E Exports 2004 US$ Million

Exports Increasing: 

Exports Increasing Source: MOC

Thai Export Markets of Electronic & Electrical Products: 

Thai Export Markets of Electronic & Electrical Products 2003

Slide8: 

Clusters in Thailand Electrical &Electronics Clusters

Big Players in Thailand: 

Big Players in Thailand PHILIPS CANON TOSHIBA WORLD ELECTRIC DAIKIN INDUSTRIES LG Electronics PIONEER NEC TOKIN ELECTRONICS TATUNG MT PICTURE DISPLAY SAMSUNG FGA MURATA ELECTRONICS MATSUSHITA ELECTRIC WORKS SANYO OKI DATA SONY FURUKAWA FITEL ELECTROLUX DDK MT PICTURE DISPLAY LTEC LTD.   NIKON CAL-COMP ELECTRONICS   CAPETRONIC INTERNATIONAL FUJIKURA MITSUBISHI HEAVY INDUSTRIES FUNAI KYOCERA KINSEKI

Location of Electronics and Electrical Factories: 

Location of Electronics and Electrical Factories # of Companies

Exporting Companies in 2000: 

Exporting Companies in 2000 US$ Million

Strong Domestic DemandExample: Home Appliances: 

Strong Domestic Demand Example: Home Appliances US$850 Million Home Appliances US$950 Million AudioVisual

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Parts Not Sufficiently Produced in Thailand Wafers and media DVD reader heads Lead frames ICs and Semiconductors Plasma and LCD Screens High precision metal parts Plastic parts Moulds and Dies Stamping Plastic injection moulds Moulds for steel, die casting Rubber and glass moulds Punch dies Extrusion moulds Moulds for tires

World Bank study in October 2003:: 

World Bank study in October 2003: Competitive labor costs Sufficient pool of available workers High workforce productivity levels Good transportation and logistics infrastructure for electronics manufacturers Lowest electricity and sewer costs among surveyed countries Political and social stability and a welcoming culture, particularly important to Japanese investors Source: MIGA, Benchmarking FDI Competitiveness in Asia, October 2003. Surveyed countries: China, Indonesia, Vietnam, Malaysia, Philippines, Thailand Thailand very competitive in critical factors to electronics manufacturing in ASEAN:

World Bank study in October 2003:: 

-- Thailand can become regional base for just-in-time electrical and electronics assembly operations. -- Thailand has the potential to become a base of niche or higher value-added component manufacturing for assembly operations -- Although Thailand’s supply base still requires import of components, It has a strategic location and potential to capture and dominate niches World Bank study in October 2003: Source: MIGA, Benchmarking FDI Competitiveness in Asia, October 2003. Surveyed countries: China, Indonesia, Vietnam, Malaysia, Philippines, Thailand

Competitive Costs of Labor in Electronics Sector: 

Competitive Costs of Labor in Electronics Sector Source: MIGA, Benchmarking FDI Competitiveness in Asia, October 2003. Surveyed countries: China, Indonesia, Vietnam, Malaysia, Philippines, Thailand

Competitive Costs of Real Estate in Electronics: 

Competitive Costs of Real Estate in Electronics Source: MIGA, Benchmarking FDI Competitiveness in Asia, October 2003. Surveyed countries: China, Indonesia, Vietnam, Malaysia, Philippines, Thailand

Slide18: 

Competitive Utility Costs in Electronics Source: MIGA, Benchmarking FDI Competitiveness in Asia, October 2003. Surveyed countries: China, Indonesia, Vietnam, Malaysia, Philippines, Thailand

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Customized Incentives & Investment Opportunities

BOI Incentives: 

BOI Incentives Manufacture of electronic products Office equipment Household appliances Automated industrial automation equipment Radio, TV or telecommunications equipment and apparatus Professional and scientific measuring and controling equipment not elsewhere specified Photographic and optical goods Parts and supplies for electronic apparatus Zone incentives and non-tax incentives

Integrated production of electronic products, electrical appliances or parts: 

Integrated production of electronic products, electrical appliances or parts Beginning-to-end production Joint applications by different companies allowed All activities beginning to end receives same tax & duty privileges as end product, excluding retail sales Must include: R&D Design Quality inspection Development of production processes Extension of technical support to local producers (as approved by BOI) Sales of final products < 2.5 billion baht/year (A$833 million)

Customized Semiconductor Package: 

Customized Semiconductor Package Wafer Fabrication

Manufacture of Integrated Circuits in:: 

Manufacture of Integrated Circuits in: Wafer processing, either before or after testing, and/or IC assembly and packaging, and/or IC Testing

Manufacture of Integrated Circuits : 

1 Year additional corporate income tax holiday for each criteria met*: *Total length of corporate income tax holiday not to exceed 8 years Manufacture of Integrated Circuits

Manufacture of Integrated Circuits: 

2 Years additional corporate income tax holiday for each criteria met*: Manufacture of Integrated Circuits *Total length of the corporate income tax holiday not to exceed 8 years. All must occur within the first 3 years If any of the five 1-year or 2-year criteria are met, the project will not be subject to the cap on the amount of corporate income tax exemption.

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Animation Cartoons and characters Computer-generated imagery Web-based applications Interactive applications Games Wireless location based service content Visual effects Multimedia video conferencing applications E-learning content via broadband and multimedia and computer-aided instruction 1. Enterprise Software (transaction processing, business solutions) 2. Embedded Software (mobile phones, microchips) 3. Digital content, including: Incentives: Exempt from import duties on machinery and 8 years corporate income tax exemption without cap Conditions: Criteria for Software production processes set by Software Industry Promotion Agency (SIPA); Projects with over THB 10 Million total Investment (excluding land & working capital) must receive CMM or SIPA standard certification Software Content

Reuters Software: 

Reuters Software

STI Incentive PackageSkills, Technology & Innovation: 

STI Incentive Package Skills, Technology & Innovation Up to 8 years uncapped income tax holiday Exemption of import duties for machinery Medical equipment Scientific instruments Electronic design R&D Scientific Labs Calibration Services Human Resources Aircraft repair Direct STI Activities

Electronic Design: 

Electronic Design Receives priority activity incentives 8-year corporate income tax exemption includes revenue from sales of products manufactured by others Electronic design includeds: Micro electronics design Prototype design Imbedded system design Design for specific applications such as: Artificial intelligence Virtual reality Neural network Education

R & D & Related Activities: 

R & D & Related Activities Up to 8 years uncapped income tax holiday Exemption of import duties for machinery R&D - Applied R&D, Product Development, Process Design Scientific Laboratory Calibration Services Human Resources Development - Educational institutes or vocational training centers - International schools - Hotel training institutes - Marine training institutes

MekTec Manufacturing: 

MekTec Manufacturing

BOI Unit for Industrial Linkage Development (BUILD): 

BOI Unit for Industrial Linkage Development (BUILD) Vendors Meet Customers program: Matches SME parts and components manufacturers with customers/assemblers. BUILD Market Place: BOI invites assemblers to exhibit samples of parts/components, meet with potential suppliers Sub-Contracting Services: ASEAN Supporting Industry Database (ASID) gives detailed information about Thai suppliers. BUILD organizes sourcing seminars for international firms, inviting appropriate SMEs