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7 Apr 2023


Supply chain restructuring … Increasing costs while pressuring margins among electronics businesses (Current Issue No.3399 Full Ed.)


        Global geopolitical issues have affected leading electronics companies worldwide. As evidenced, the US and its allies have accelerated adjustments of production bases to reduce their trade reliance on China, through the imposition of laws and measures to drive investment in their own countries, while forming coalitions to enforce export controls.

        KResearch holds the view that the US and its allies may escalate measures to block the development of advanced technologies in China. The move may even accelerate the reorganizing of supply chains across the globe. It will take some time before the benefits of new manufacturing base development can be seen, even though some measures are in place to support such investment. Given this, electronics companies worldwide, including in Thailand, are likely to face increasing cost pressures and reduced margins. Meanwhile, consumers may face rising prices of electronic products.

        Thailand would benefit from supply chain reconstruction, especially in the assembly of basic electronic components. Focus would be on investment in downstream industries such as automobiles and some electrical appliances. However, overall positive effects on investment in Thailand may remain limited when compared to neighboring countries.

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