US Commerce Secretary Gina Raimondo says American firms are ready to “supercharge” their investment in Thailand and that the country can gain from Washington’s desire to diversify production of computer chips.
Raimondo is on a tour to Southeast Asia looking to push additional investments into countries that are part of the Indo-Pacific Economic Framework (IPEF).
Speaking at an event in Bangkok on Wednesday, she said: “Production of semiconductors is dangerously concentrated in one or two countries in the world”, adding that the US is keen to diversify its sources where microchips are produced.
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Thailand’s electronics industry is a magnet for foreign investment and a sector that Thai Prime Minister Srettha Thavisin’s government is looking to expand as it seeks to rev up its sluggish economy.
The US-led IPEF, aimed in part at providing countries in the region with an alternative to closer ties with China, consists of 14 countries, including Thailand.
“So we’re all in this together. It benefits everyone, the United States, Thailand, all the IPEF countries, to diversify the supply chain of semiconductor production,” said Raimondo, who will hold talks with Thavisin on Thursday.
In 2022, the US passed the landmark “Chips and Science” law that provides $52.7 billion for US semiconductor production, research and workforce development.
Thailand’s semiconductor industry, dominated by firms from the US, Japan, Korea and the Netherlands, is largely focused around the back-end process, putting the country at par with Vietnam and India, according to a 2023 Siam Commercial Bank report.
“The shifting dynamics of the global manufacturing supply chain, influenced by geopolitical conflicts, have attracted semiconductor production facility relocations to Thailand,” the report said.
Thailand’s Board of Investment is also offering incentives, such as tax breaks and duty exemptions, to draw investments into the semiconductor industry.
“As US multinationals look to diversify their supply chains, Thailand is increasingly a place that comes to the top of the list,” Raimondo said.
Raimondo visited the Philippines earlier this week, where she said US companies were set to announce investments amounting to more than $1 billion in the country, a staunch US ally. The investments will span areas like solar energy, electric vehicles and digitisation, she said.
- Reuters with additional editing by Jim Pollard
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