Japanese Firms Eye Thailand as Production Hub Amidst China Concerns

Strong infrastructure, skilled workforce, and government support lure companies seeking regional production hub

 

Japanese companies are considering relocating some production from China to Thailand, seeking supply chain resilience and reduced exposure to US trade tensions.  

 

This comes after a successful investment mission to Japan by the Thailand Board of Investment (BOI).

 

BOI Secretary-General Narit Therdsteerasukdi reported strong interest from Japanese businesses during the February 19th-21st visit.  He emphasised the focus on diversifying production away from China to mitigate supply chain vulnerabilities and potential US trade restrictions.

 

The Thailand-Japan Investment Forum 2025 attracted companies from diverse sectors, including automotive, electronics, machinery, petrochemicals, plastics, processed food, financial services, digital businesses, trade, and logistics.

 

The BOI highlighted Thailand's readiness for investment, emphasising its commitment to sustainable development through:


Human Capital: Investing in education and skills training.
Infrastructure: Developing transport networks, digital infrastructure, water management, and energy systems.
Innovation: Fostering innovation across industries.
Government Support: Providing supportive policies, regulations, and a business-friendly environment.
 
 

The BOI also promoted investment in high-value-added industries and agriculture, positioning Thailand as a key market, production base, R&D hub, and supply chain partner. 

 

Incentives and opportunities were showcased across five future-focused sectors: Bio-Circular-Green economy, electric vehicles, semiconductors and electronics, digital technologies, and international business centres.

 

The automotive sector, a key interest for Japanese investors, saw the BOI outline measures to upgrade production technology, encourage joint ventures, promote domestic parts usage, support hybrid vehicle production, and invest in clean energy and skills development.

 

Senior executives from Japanese firms like SMBC Bank, Mitsubishi, and Fujikura shared their positive experiences of investing in Thailand and highlighted emerging opportunities.

 

Narit detailed discussions with Japanese investors in three key sectors:

 

Semiconductors: Meetings with Toshiba, MinebeaMitsumi, and Rapidus revealed interest in advanced back-end semiconductor assembly and testing in Thailand, particularly for power electronics used in automotive, data centres, and energy storage. The BOI also discussed workforce development with the Leading-edge Semiconductor Technology Centre (LSTC).
  

Automotive: Isuzu and Mitsubishi Motors reaffirmed their commitment to Thailand as a key production and export base. Isuzu will produce BEV pickups for export to Norway this year and is developing battery-swapping and e-fuel commercial vehicles. Mitsubishi Motors plans a new HEV model and will produce BEV small transport vehicles in late 2025.

 

Food and Packaging: Suntory Group expressed interest in expanding beverage and health product manufacturing in Thailand. The BOI encouraged R&D activities and discussed environmentally friendly packaging, aligning with Suntory's 2030 sustainability goals.

 



 

Narit also met with Japan's Minister of Economy, Trade and Industry (METI), and the president of JETRO.  They agreed to strengthen government-to-government cooperation via the Energy and Industry Dialogue (EID), focusing on automotive and supply chain development, new energy sources (SAF, biofuels, hydrogen), SME and startup promotion, and supporting Japanese businesses in Thailand.

 


“The visit was highly successful, attracting over 400 seminar attendees. All companies we met plan to expand their Thai investments. Japan values Thailand as a key regional production hub, recognising its growth potential, low geopolitical risk, strong supply chain, and robust infrastructure,” Narit concluded.  


 

He added that the meeting with Minister Muto bolstered investor confidence, assuring them of close collaboration between both governments to support Japanese businesses in Thailand’s competitive and rapidly evolving technological landscape.

(2025/02/24-00:00)