Thailand wants to attract more foreign investment to produce advanced semiconductors this year, according to the Board of Investment (BoI).
Many companies in China and Taiwan plan to expand investment in Thailand, particularly for printed circuit boards, as they look to avoid geopolitical risk, said Wirat Tatsaringkansakul, deputy secretary-general of the BoI.
"They will come in clusters, offering more advanced technology," said Mr Wirat.
Thailand is attractive as an advanced manufacturing base during these times of geopolitical tension thanks to its strong infrastructure, skilled workforce and tax privileges, he said.
According to the BoI, in 2023 total investment on semiconductor production in Thailand was 800 billion baht.
Sony Device Technology (Thailand) (SDT) recently invested 2.3 billion baht to set up its new semiconductor fabrication building (Building 4) for the assembly of image sensors for automotive applications and display devices, as well as the mass production of laser diodes for data centre applications.
The company is considering relocating some upstream technologies of semiconductors from Japan to Thailand in the future, said managing director Takeshi Matsuda.
SDT decided to set up Building 4 in Thailand because of the geopolitical situation and the country has cost advantages and skilled engineers on par with Japan, he said after the opening ceremony at the SDT facility in Pathum Thani province.
Occupying 66,370 square metres, the building will be mainly used to assemble image sensors for driver safety in cars, micro organic light-emitting diode (OLED) displays used in augmented reality and virtual reality headsets, and laser diodes used in data centres, said Mr Matsuda.
He said the automotive sector and data centres are important players in the Thai economy.
SDT has 1,600 staff and the new facility should add 2,000 employees within three years, said Mr Matsuda.
The new plant is scheduled to start production of laser diodes by the middle of this year.
The manufacturing of image sensors for automotive applications will start next year, he said.
Terushi Shimizu, chief executive of Sony Semiconductor Solutions (SSS), said SSS is the global leader in complementary metal oxide semiconductor sensors.
The assembly of image sensors for cars, micro OLED displays and laser diodes comprise the company's medium to long-term plans for future growth.
"Semiconductors form an important foundation to pave the way for the digital era, and are critical at the national level. Innovation is important for Thailand and Japan," said Mr Shimizu.
"Semiconductor factories here will contribute not only to the development of communities, but also support both Japan and Thailand moving forward."
Mr Wirat said SDT has served as Sony's only semiconductor manufacturing base outside Japan for more than 30 years.
Sony Group has 17 projects in Thailand with a total value of 22 billion baht and 8,000 employees, he said.
Recently Sony applied for new investment for integrated circuits worth 5 billion baht, according to the BoI.
SDT serves as a production centre for the assembly of the main product line within Sony's imaging and sensing solutions business.
Executive director Somchok Vukthong said SDT has major production lines for image sensors used in cameras.