What To Know
- Local electronic product manufacturers stressed that now is a critical moment for established manufacturers to step in and support their smaller supply chain partners through cost-sharing measures, operational efficiency improvements, and strategic collaborations.
- Decisions taken in the next year—regarding production strategies, cost control, and partnerships—could determine whether the sector emerges stronger or struggles to maintain its place in an increasingly competitive global market.
Bangkok Business News: Manufacturers Brace for Shifting Global Trade Dynamics
Thailand’s electronics sector, employing around 650,000 workers, is bracing for turbulent times as escalating US tariffs force companies to tighten budgets, freeze hiring, and even explore partial relocation of production to lower-cost countries. According to the many local electronic product manufacturers, the goal is to safeguard competitiveness and absorb the impact of changing trade policies. This Bangkok Business News report highlights how shifting manufacturing bases to nations like Vietnam and Malaysia is becoming an increasingly realistic option for many firms that already operate multiple international facilities.
Many local electronic product manufacturers seeking to relocate out of Thailand
Image Credit: AI-Generated
Although the US tariff rate for Thai-made goods stands at 19%—similar to other Southeast Asian countries—Thailand lags behind some regional rivals in production efficiency. Many local electronic product manufacturers noted that Malaysia and Vietnam currently offer stronger performance in certain electronics manufacturing segments, making them attractive alternatives for new or expanded operations.
Ripple Effects from US Tariff Policies
The industry’s uncertainty deepened after US President Donald Trump, following a meeting with Apple CEO Tim Cook, announced plans for a sweeping 100% tariff on foreign computer chips. The move would exempt only companies with current or planned US manufacturing investments. Major players like Taiwan Semiconductor Manufacturing Company and Nvidia are likely to avoid the tariff, but most Asian producers would be affected.
This policy shift could sharply disrupt global supply chains, pushing costs higher and dampening demand for consumer electronics in the US market. Local electronic product manufacturers warned that such pressures are already reducing export optimism for the year, especially after heavy frontloading of shipments in the first half of 2025.
Pressure on Small and Medium-Sized Enterprises
While large multinational corporations may have the resources to adapt, smaller Thai electronics firms could face significant challenges. SMEs—already operating with slimmer margins—risk being squeezed by both rising costs and declining overseas demand. Local electronic product manufacturers stressed that now is a critical moment for established manufacturers to step in and support their smaller supply chain partners through cost-sharing measures, operational efficiency improvements, and strategic collaborations.
Shifting Strategies for Survival
The broader electronics market is also grappling with falling consumer demand, as higher tariffs in the US make imports more expensive. This has forced companies to put recruitment plans on hold and focus heavily on operational streamlining. The coming months are likely to see further reassessment of investment plans, with more companies considering hybrid production models that split manufacturing between Thailand and other regional hubs.
Thailand’s electronics industry now faces a defining period. Decisions taken in the next year—regarding production strategies, cost control, and partnerships—could determine whether the sector emerges stronger or struggles to maintain its place in an increasingly competitive global market.
For the latest on Thailand’s electronics industry, keep on logging to Bangkok Business News.
