An in-person visit reveals unrealized potential.

It’s been almost two years since the authors’ first visit to Thailand, which occurred just after Covid travel restrictions were lifted. We first reported on our impressions of Thailand’s PCB manufacturing environment in August 2023.

On our first visit, ground was just being broken on several large facilities funded mostly by Chinese parent companies. These new plants are located a few hours outside Bangkok in large industrial parks with wide roads and plenty of land between neighboring factories.

On what was cleared land just two years ago, newly constructed modern facilities now stand, with room for an additional building or two. These new factories have large floor plans for each of the major processes involved in making a printed circuit board.

Some of these factories are designed with environmental sustainability in mind by collecting the abundant rainwater that seasonally falls on the facility roofs for eventual use in the PCB manufacturing process.

The equipment in these facilities is the latest and greatest. The plating lines are long, brand-spanking new and do not have the usual obnoxious odors wafting about. Back in the day, the plating lines (also known as “wet process”) often were accompanied by wet floors. But these new Thai facilities are dry and immaculate.

Autonomous guided vehicles (AGVs) are readily available to take manufacturing panels from one department to another (Figure 1). These AGVs even have their own special mini elevator system to take them from floor to floor.

Figure 1. AGVs are commonplace at new Thailand PCB factories.

Many facilities have all this great equipment, but do not possess enough of it. They are in the first phase of gradually increasing production volumes, expected for now to produce about 40,000-50,000 sq. m per month, using about 300 employees each.

Rooms set up to house eight laser drill machines have only two installed. A room that holds a plating line, be it for the inner- or outer layer process, has capacity for two more. Each department – automatic optical inspection, drilling, routing, press – has plenty of space for more equipment to add as demand increases.

Yes, they are operational and actively building quality product, but they are not at capacity, even with the limited amount of equipment installed. Many of the AGVs were standing idle when we visited because of the lack of work on hand.

While Thailand has been mostly known for low-mix, low-to-medium technology PCB manufacture, these new facilities are gearing up to take on higher-mix and higher-technology boards that are more conducive for sales to the US market.

With over 20 large PCB facilities currently manufacturing or about to begin operations in Thailand, machine operators, engineers and chemists – who are experienced in PCB manufacture – are in high demand.

High demand means short supply, and many of the established domestic factories have had technicians and engineers hired away by other manufacturing newcomers. And the available personnel have little or no proof of actual IPC training or certification.

It was interesting to note during our visit that English was the common language spoken between Chinese management and the local Thai workers. Language is still the greatest barrier, meaning it will take more time for a factory to become a cohesive operation. Some in management at these facilities estimate that could be as much as a year.

While Thai labor is much cheaper than that of China, the cost for electricity is 25% greater. Many of the chemicals and laminates required for board manufacture still come from China, which adds to the cost.

While Thailand does manufacture raw materials, it is not enough to support the burgeoning industry. A major Chinese laminate supplier intends to open a new facility by year’s end to hopefully ease the burden.

All that said, pricing for PCBs manufactured in Thailand is 15-20% higher than in China.

For now, the 25% US-imposed Section 301 tariffs for all PCBs manufactured in China do not apply to PCBs manufactured in Thailand. That is good news for US buyers, but the average time to receive a quote and for an order to ship is much longer, averaging six to eight weeks.

In comparison, China will quote a PCB in a day and will ship most product in three to four weeks or less.

And don’t forget, a 10% reciprocal tariff exists between the US and Thailand. As of the time of this writing, higher tariffs imposed on Chinese goods are on hold, and it’s unclear whether they will continue.

In our estimation, a total cost of ownership difference of only 10-15% will give pause to many buyers wanting to move work from a known supplier in China, where they likely have buying leverage, to an up-and-coming factory in Thailand.

The next 12-18 months will determine how successful Thailand will become as a PCB manufacturing player. It is not from the lack of investment, as there seems to be no shortage of monies pouring in. Instead, the politics, tariffs, struggles with labor and shoring up of the internal supply chain will determine the outcome.

Greg Papandrew and Clement Yuan are cofounders of DirectPCB (directpcb.com) and can be reached at greg@directpcb.com.

“Without capacity, there is no growth.”

As I write this column, the duty rate for 2- and 4-layer rigid printed circuit boards manufactured in China stands at 145%, while 6-layer and above – along with all other technologies, whether rigid, flex or metal – remains at 170%.

A discussion with PCBAA president Shane Whiteside.

I recently sat with Shane Whiteside, president and CEO of Summit Interconnect, in his capacity as chairman of the Printed Circuit Board Association of America (PCBAA), to discuss the state of the PCB industry and the effects of the additional tariffs currently in place.

Whiteside’s PCB manufacturing and leadership career spans several decades, which lends itself well to PCBAA’s mission to advocate for a stronger US PCB industry. The association is working hard to educate and influence those in Washington, DC on the importance of a secure US electronics supply chain.

Naka nailed it: The domestic PCB industry will flounder without a clear direction.

“History is always repeating itself, but each time the price goes up.” – Will Durant

In February 2017, I wrote a column titled “An Afternoon with Naka” in which Hayao Nakahara (or Naka to his friends) – a true PCB veteran embarking on his 60^th year in the industry – described the state of the US PCB manufacturing. Naka nailed it then. And eight years and two presidential administrations later, his analysis is just as applicable.

Let’s review some of what I call his “Naka-isms” and how they apply, with the additional element of tariffs, which, for obvious reasons, are top of mind for many in our industry right now.