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21 Feb 2014

Industry

Electronics Exports, 2014: Growing 4.1 Percent amid Eroding Sentiment (Current Issue No. 2468 Full Ed.)

Thai electronics exports contracted 1.0 percent to USD31.7 billion in 2013 as our computer and related equipment shipments – that normally constitute 42.4 percent of the total electronics exports – plummeted 11.7 percent as a result of sluggish demand for computers globally. However, other electronics exports continued to perform well, e.g., computer components, integrated circuits, printed circuits and semiconductors that saw their export shares of 12.9 percent, 22.8 percent, 3.0 percent and 2.3 percent in 2013, increasing 13.5 percent, 7.9 percent, 53.7 percent and 20.0 percent, respectively over 2012.
In 2014, we at KResearch expect that Thai electronics exports will grow only 1.9-4.1 percent to USD32.3-33.0 billion because such exports as hard disk drives (HDD) and integrated circuit controllers rely heavily on global computer demand. Another inhibiting factor will be eroding sentiment among foreign investors toward Thailand given domestic political uncertainty that may impede progress on development of investment promotions to attract future FDI. If the current political standoff is prolonged, it is expected that many foreign investors may delay further investments into Thailand or relocate production to other countries, e.g., Malaysia or the Philippines that have similar electronics industrial structures to that of Thailand.
However, there are several factors that should support Thai electronics exports. Among them would be: 1) major trade partners' economic recoveries: 2) growing demand for automotive electronics as global automotive companies are shifting from fossil fuel- powered car production towards hybrid and/or electric vehicle production. As a result, global demand for printed circuits, integrated circuits, electronic sensors, charging and power inverter systems will likely grow in 2014; and, 3) increased demand for HDD given the need for more cloud storage amid greater number of smartphone users and growing use of social media to upload pictures and videos.

Future opportunities for the Thai electronics industry will depend on building electronics clusters for smart electrical appliances, given that Thailand is already one of the world's important manufacturing bases, thus capable of producing various smart household appliances. Future opportunities also open for other products, such as home automation systems and smart garments that can monitor the wearer's physical state.

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