The baht opened at 33.46 to the US dollar on Wednesday, strengthening from Tuesday’s close of 33.54.
Krungthai Bank market strategist Poon Panichpibool expects the Thai currency to move between 33.40 and 33.60 during the day.
Poon said the baht was likely to swing in a wide range. However, the market was open to more risks and might influence foreign investors to purchase Thai stocks, causing the baht to strengthen.
Meanwhile, short-term bond transactions, which pressure the baht to weaken, might slow after foreigners invested around 2 billion baht in these bonds. He recommended monitoring the situation to see if the investors return to buy up more of the bonds.
In the short term, Poon predicted, the baht’s resistance level would be 33.60 to 33.75, a level which might see exporters offloading the dollar. The key support level would be 33 to 33.20, which would spur importers to purchase the greenback.
Four Thai commercial banks were downgraded by S&P Global Ratings over concerns that the commercial banks operating in Thailand would be affected by increasing systematic risks.
The S&P announced its new ratings for Thai banks on Tuesday, which showed Siam Commercial Bank and Kasikornbank downgraded from “BBB+” to “BBB”.
The S&P also downgraded Krungthai Bank and TMBThanachart Bank to “BBB-” from “BBB”.
The S&P, however, reaffirmed “BBB+” for Bangkok Bank and Bank of Ayudhya. The ratings agency reasoned that Bangkok Bank has high systematic importance in Thailand and this quality offsets the risk. It said Bank of Ayudhya benefits from being a strategic subsidiary of Mitsubishi UFJ Financial Group.
S&P also announced that its research team has revised down the standalone credit profiles of all the six banks by one notch because the team expects the banks to continue to face structural issues due to the economic situation in the country.
The S&P added that the country’s economic recovery would remain fragile and uneven across sectors in Thailand. It predicts that the tourism sector would be further hindered by the Russia-Ukraine war.
The ratings agency also expects that non-performing loans in the Thai banking sector would continue to rise over the next 24 months to five per cent, which will be the highest since the 2008 global financial crisis.
Five chartered flights carrying durians to China have been indefinitely cancelled following a China Eastern Airlines plane crash in China, a Thai academic said on Tuesday.
Sakda Sriniwet said that following the crash in Yunnan, the airline has informed a Thai exporter that five of its chartered flights have been cancelled with no schedule for resumption.
China Eastern Airlines’ flight MU5735 crashed in mountainous terrain with 132 people on board about an hour into its journey from Kunming to Guangzhou.
Sakda, a former expert from the agricultural product quality development office of the Agricultural Extension Department, said he has learned that one exporter has been affected so far but he is not certain whether other exporters were also affected.
Sakda said the exporter had made a guarantee payment to book the chartered flights. He said China Eastern Airlines has not informed the exporters when it could resume the services.
He said flight cancellation would cause huge damage to durian exporters because freight flights were now the only effective way to transport durians to China.
Sacked explained that China has closed its border checkpoints and closed its ports to try to stem the spread of the Covid-19 and it would take several more months before Thai exporters could use freight services on the China-Laos high-speed railway.
SCG Solar Roof Solutions, a leading solar rooftop system for homes, is joining up with US energy service provider Enphase Energy, to power microinverter technology to become the first and only provider of solar systems in Thailand’s residential market.
SCG Solar Roof Solutions, a leading solar rooftop system for homes, is joining up with US energy service provider Enphase Energy, to power microinverter technology to become the first and only provider of solar systems in Thailand’s residential market.
“We are living in an era of ever-changing technology to make our lives easier, better and greener. Solar energy, known as renewable or clean energy, is a global trend that every sector is focusing on because it helps consumers by reducing electricity bills, and the world by lowering carbon dioxide emission and contributing to a greener environment,” a statement from SCG said.
Thongchai Sophon, SCG’s chief of housing products business, said the solar rooftop market has grown dramatically, especially in the industrial sector, where the technology has been focused on as an investment for cost reduction.
In the household sector, he said, solar projects have been encouraged and developed to become more accessible and affordable to reflect the energy consumption behaviour of consumers who have been working from home during the Covid-19 pandemic.
“SCG Solar Roof Solutions is cooperating with leading energy service provider in the US, Enphase Energy, to create solutions that power microinverter technology driven by intelligent software to elevate solar roof systems,” he said.
He added that SCG is ready to become a one-stop service of the residential solar market with its advanced yet clean technology solution of solar rooftops.
Meanwhile, Dave Ranhoff, chief commercial officer at Enphase Energy, said he was pleased that Enphase has joined forces with SCG, the largest and longest-standing building material company in Thailand and emerging champion for solar energy in the region.
In the partnership, Enphase microinverters provide great value with a complete AC solar solution that does not use high-voltage DC and with rapid shutdown as standard, he added.
“We look forward to working together to bring the most reliable solar technology to the Thailand market,” he said.
He added that the company’s microinverter technology, which is a single panel solar control system, is considered the most cost-effective system.
There is also a rapid shutdown system that quickly shuts down the system for maximum safety, he said.
“We also believe that moving forward with SCG will help raise the standard of the solar roof system to be more efficient and be ready to become a leader in the Thai market,” he added.
Why did SCG choose the microinverters system?
Microinverters convert solar energy from DC power to AC power and generate power efficiently yet safely throughout the house. With one microinverter per module, solar production keeps working even if the microinverter fails. This smart software system can guarantee the safety of all users.
High Performance
Even when there are shadows or clouds passing over the solar array, this technology can capture energy because each solar panel operates independently.
Safety
Microinverters are inherently safe because they operate at the same low voltage AC power as your home. With built-in “rapid shutdown”, utility workers and first responders are safe as your solar power is turned off instantly in case of emergency.
Real-Time Monitoring
Users can easily monitor and manage power-generating efficiency through the home in real-time from SCG Solar Roof Solutions Application.
“SCG Solar Roof Solutions targets solar rooftop to be the leading enterprise of the residential solar market in Thailand by aiming to secure our sale at 300 per cent from 2021 using customer database strategy together with cooperating with strategic partners like Enphase Energy,” Thongchai said.
“We provide an all-in-one system from checking the roof before installing solar panels to designing and submitting for government approval with a 25-year warranty to ensure that the installation is standardised and safe for users. We believe this cooperation will strengthen and enhance our performance to the maximum,” he added.
There is no denying that the era of clean energy is coming. The almost daily rise in the price of energy is expected to stimulate Thai society to use more clean energy.
There is no denying that the era of clean energy is coming. The almost daily rise in the price of energy is expected to stimulate Thai society to use more clean energy.
The Federation of Thai Industries (FTI) has addressed this trend for clean energy by joining with other organisations to launch a project that has been well-received worldwide. FTI, as the representative of private industry, joined hands with the Provincial Electricity Authority (PEA) to sign a memorandum of agreement on a pilot project to develop renewable energy and carbon credits on March 14.
The resulting renewable energy trading platform will run under the second phase of the Energy Regulatory Commission (ERC)’s sandbox programme. The ERC launched the programme to test various energy-related innovations.
The clean energy and carbon credit trading platform will be a key tool for making electricity trading contracts, to support the upcoming carbon credit market in the industrial sector. PEA will have a hand in delivering energy to purchasers, which will see more renewable energy sent to the manufacturing sector.
The initiative is in line with Thailand’s new energy policy and goal to reach carbon neutrality by 2050 and net-zero emissions by 2065.
This collaboration between the government and private sector to create the clean energy and carbon credit trading platform will help to encourage renewable energy development in the Thai industrial sector. If the plan is successful, the renewable energy platform will open to the whole country within two years, which will be a key step on the path to Thailand becoming a low carbon society.
AIA Thailand has now officially opened a sales gallery at AIA East Gateway, its new premium office building with retail space, located on Bangna-Trat Road Km4.5.
AIA Thailand has now officially opened a sales gallery at AIA East Gateway, its new premium office building with retail space, located on Bangna-Trat Road Km4.5.
Developed as a green building with ESG at the core concept, emphasising AIA’s brand promise “Healthier, Longer, Better Lives”, AIA East Gateway is the third real estate investment by AIA, following the tremendous success of its earlier projects – AIA Capital Centre and AIA Sathorn Tower.
The construction of AIA East Gateway is scheduled for completion by the fourth quarter of 2022.
Johann Dutoit, Chief Investment Officer of AIA Thailand, said that AIA Thailand has continued to invest in real estate in line with AIA Group’s vision to diversify its investment portfolio.
AIA Thailand’s real estate investment will not only help drive the Thai economy, but AIA East Gateway will also offer premium offices and healthy lifestyles to office workers in Bangna, especially in the Next Normal era.
“AIA has been successful in developing two premium office buildings, namely AIA Capital Centre on Ratchadaphisek Road and AIA Sathorn Tower in Bangkok’s Sathorn area,” he explained.
“Currently, the occupancy rate of these two buildings is as high as 90 per cent, despite an economic slowdown amidst the Covid-19 outbreak that has dragged on for two years already.”
Spread over more than 10 rai (1.6 hectares) of land, AIA East Gateway will perfectly accommodate business expansions of Thai and foreign business groups and leading investors in this emerging CBD location of Bangna, he said.
AIA has recognised the potential of the Bangna–Trat area in both its outstanding development potential and strong economic growth. Its potential is solid for both the present and the future as Bangna-Trat is emerging as a new central business district (CBD) in Bangkok’s Eastern area.
This new CBD has convenient access to various transportation systems. It is easily accessible from both the Green Line and Yellow Line (Lat Phrao–Samrong), which will begin operating in the middle of 2022.
AIA East Gateway sits about 350 metres from the Yellow Line’s Si Iam station. The Yellow Line promises to enable easier and more convenient commute in and out of the inner-city area.
In the near future, the Yellow line will also be integrated with other mass transit routes such as the Blue, Grey, Orange, Pink and Green lines, and the Airport Rail Link.
AIA East Gateway is a 33-storey office building having an approximate area of 136,000 square metres with completion scheduled by the fourth quarter of 2022. The building will be built in accordance with the LEED Certification standard and the WELL Building Gold standard.
The LEED standard emphasises energy conservation and environmentally friendly construction, while the WELL standard focuses on the well-being of tenants.
This new building will be fully equipped with world-class health-themed facilities, encouraging dwellers to live “Healthier, Longer, Better Lives”. AIA Vitality Zone will provide health-promoting activities for building dwellers, allowing them to participate in the Urban Farming zone, which will also be a part of the building.
AIA East Gateway will boast a fully-equipped fitness centre with urban farming, rooftop running track and a saltwater swimming pool. Moreover, this building will include a co-working area and more than 1,500 parking lots.
Roongrat Veeraparkkaroon, managing director of CBRE (Thailand), said that judging by its potential, prominence, and location in the new CBD, right on Bangna–Trat Road Km4.5, AIA East Gateway is truly a new outstanding landmark.
Its ceiling is a remarkable three metres high. Its modern design is also complemented by world-class energy-efficient technologies and green solutions, she added.
“On top of that, AIA East Gateway will also feature retail space, various parks, urban farming, and an exercise space. It, therefore, promises to answer well to the lifestyles of tenants who look for a quality office building and practical facilities for building users,” she said.
AIA East Gateway is slated to offer over 70,000 square metres of lettable area; inclusive of 10,000 square metres of retail space that will span across the building’s five floors.
Each unit of retail space will start from 20 square metres in size. Retail space on the first to third floors is for shops, cafes, and convenience stores. The fitness centre and a swimming pool will sit on the fourth floor. Co-Working Space, meanwhile, will sprawl over both the fourth and fifth floors.
Total office space at AIA East Gateway is approximately 60,000 square metres. It is available from the sixth to 33rd floors. Each unit of office space starts from 85 square metres in size. The biggest unit covers the whole floor, with 2,270 square metres of space.
Tenants can design their office space with a great amount of flexibility. In addition, it is possible to instal internal stairways between floors for extra convenience.
With a ceiling height of three metres, the office space gives a sense of space and enhanced natural light. Each for-rent unit is column-free, rendering every square metre of the space fully usable.
AIA East Gateway’s asking rental rate is 700 baht per square metre per month.
People who are interested in visiting the project site or seeking additional information, can call 02-119-1500 from Monday to Friday between 8.30am and 5pm.
Singha Estate Plc on Monday unveiled the company’s ambitious 2022 business direction, aiming to nearly double year-on-year (YoY) growth to a new high of 13.4 billion baht. The company aims to achieve this through well-diversified portfolios, as well as collaborating with strategic partners to strengthen its four core businesses.
Singha Estate also announced its vision to grow at 25 per cent compounded annual growth rate within five years by exploring new business opportunities that respond to mega-trends and complement the synergy across existing businesses and enhancing strategic partner collaboration.
Thitima Rungkwansiriroj, chief executive officer of Singha Estate Plc, said the company’s strategies during the past two years have been aimed at diversifying investment across all four core and connected businesses.
She was confident that negative sentiments, such as Covid-19, the Russia-Ukraine conflict and inflation, would not affect the company’s operations.
“In 2022, we continue to be even stronger, both in terms of revenue and financial stability, through projects in the pipeline, joint-venture projects, as well as having a long-term lease of premium assets with S Prime Growth Leasehold Real Estate Investment Trust [SPRIME],” she said.
“We expect 2022 revenue to nearly double YoY, from THB7.74 billion to THB13.4 billion.”
Around 25 per cent of total revenue will be generated from the residential business, 8 per cent from commercial business, 4 per cent will come from the industrial estate and other businesses, while 63 per cent will come from the hospitality business, she said.
Around 50 per cent of revenue in the residential business is expected from the transfer of two ready-to-move-in condominium projects — The Esse at Singha Complex and The Esse Asoke, and the luxury housing project Santiburi the Residences — whose backlog is at THB2.6 billion. The company expects to realise around 70 per cent of the backlog as revenue this year.
In addition, Singha Estate plans to launch another housing project, worth 2.9 billion baht, located in the Patthanakarn area by the second half of this year. The new project’s revenue is expected to be recognised within 2022.
In commercial business, it will officially launch S Oasis, the new premium office building with retail spaces in Lat Phrao district, having approximately 55,700 square metres of total space. Singha Estate expects around 50 per cent occupancy rate in the year of the launch.
The company also plans to relaunch S Metro, a prime office building in Bangkok’s Phrom Phong area.
The hospitality business has seen exponential growth since last year and is expected to grow 88 per cent, generating revenue of THB8.5 billion, she said. It would make the company the No. 2 hotel operator in terms of revenue.
A well-diversified strategy allowed the company to have properties in the key travel destinations around many regions of the world, particularly in the world’s major growth engines such as the UK and the Maldives, she said.
There is upside growth potential if the tourism and hospitality business pick up later in the year, Thitima added.
In addition, the company has continued to develop and renovate high potential properties through asset rotation, upgrading services and offerings to cater to more diverse targets. For example, adding pool villa-type accommodation in the Maldives properties to respond to the demand of guests from the Middle East, she explained.
The average daily rate has increased to v10-20 per cent and once all renovation is completed, the company expects a 40 per cent increase in profit.
The industrial estate business is ready to start realising income for the first time in 2022 through sales and land transfer after the company invested and developed the land, utility system, and infrastructure last year. Singha Estate expects to transfer 15 per cent of the 992 rai (158.72 hectares) of the total area of the industrial estate.
During the past years, Singha Estate has forged several partnerships to enhance investment capability and project development across all business portfolios.
For example, the partnership with Hong Kong Land for higher outreach to potential foreign buyers in the ultimate-luxury condominium project The Esse Sukhumvit 36, valued at 5.9 billion baht, and the joint venture project with Wai Eco World Developer to develop 80 luxury villas at SO/ Maldives, the newest addition to the two existing resorts at Crossroads Maldives.
Also, Singha Estate plans a long-term lease agreement of three premium office buildings and retail space with SPRIME.
The move will uplift SPRIME to No. 1 position in Office Real Estate Investment Trust.
Since the end of 2021, Singha Estate has invested in the industrial estate and infrastructure business and holds a 30 per cent ownership of B.Grimm Power (Angthong) 1 Limited, operating a 123MW combined cycle co-generation power plant. In 2022, the company will be able to realise revenue from the first full-year performance.
The company has two joint venture projects in B.Grimm Power (Angthong province) 2 Limited and B.Grimm Power (Angthong) 3 Limited, to operate the cycle co-generation power plant with a total of 280MW, which is expected to start commercial operation in 2023.
Thitima said the company’s vision and business direction in the next five years will leverage the strength of the four well-established business pillars to create an internal synergy, leading to new business opportunities that strengthen its business portfolio and meet market demands.
The independent financial advisers of True Corporation and Total Access Communication (DTAC) have advised shareholders to vote in support of the merger of the two telecom companies next month.
The Kiatnakin Phatra Financial Group, advisers to True, and the Tisco Financial Group, which is advising DTAC, issued their assessment report in support of the merger.
Both advisers urged shareholders of the two public companies to back the merger during the general assemblies of shareholders on April 4.
Kiatnakin Phatra said in its report that the merger would benefit True shareholders due to increased gains from investments in future technologies and from a larger base of customers, increase in work efficiency and reduction in operation costs.
Kiatnakin Phatra added that the merger is aimed at restructuring the business and building the telecom company into a comprehensive technology organisation amid rapid change in technology, so that True and its telecom network would remain competitive.
Kiatnakin Phatra said in the report that a suitable share-swap ratio should be one True share for a 0.59714 to 0.62643 share in the new company.
Tisco said in its report that DTAC has a good reason and reasonable need to merge with True because the merger would help increase business potential and long-term growth.
The Tisco report said DTAC would stand to gain from the merger so the plan is reasonable.
Tisco told the shareholders that a DTAC share should be exchanged for 6.13444 shares in the new company.
Meanwhile, the KTBST SEC, an analyst firm, said in its report that the supportive views of the advisers would help push the deal forward and get a positive response from the market.
The KTBST SEC said DTAC’s profit is expected to grow 13 per cent to 17 per cent from 2021 to 2026 while True’s profit is expected to grow exponentially by 54 per cent to 157 per cent from 2022 to 2026.
The group also revealed the Bitkub Metaverse project in association with The Monk Studio, a Thai company behind world-class animations.
Bitkub Chain Technology Co. Ltd, a subsidiary of Bitkub Group, is taking major strides towards building digital economy infrastructure by launching public firms and leading IT organisations as Node Validators. The group also revealed the Bitkub Metaverse project in association with The Monk Studio, a Thai company behind world-class animations.
Bitkub Chain saw extensive moves last week towards its future direction. It was revealed that the Erawan Hard Fork process has begun to transform Bitkub Chain’s consensus system from Proof of Authority to Proof of Stake Authority with 21 Node Validators, which are all secure and reliable companies. For instance: ▪️Minor International Plc (MINT) engages in investment in hospitality, restaurant, and lifestyle brands distribution. MINT operates over 520 hotels and service suites in self-owned, joint venture hotels, and management hotels. ▪️Saha Pathanapibul Co Ltd (SPC) is a distributor of various products. The company’s products are divided into four categories: household goods, food, personal hygiene items, and infant products. Sahapat has comprehensive distribution networks throughout the country.
▪️TPCS Plc is a manufacturer and distributor of B2B and B2C products in a variety of industries comprising fabrics in automobile, textiles for industrial applications, health products, household products, baby and kids’ products, and lifestyle products. TPCS is well-recognised and trusted by leading multinational lingerie and automotive companies. ▪️Siamrajathanee Plc (SO) is Thailand’s biggest outsourcing service provider. Its main businesses are SO People (personnel management), SO Wheel (varied car rental services), SO Next (electronic data and document), and SO Green (comprehensive landscape management). ▪️Proen Corp Co Ltd (Proen) is a provider of Internet Service, Internet Data Centre, ICT solutions, cloud service, and integrated telecommunication. The company also offers computer system equipment, information technology, and the supply of telecommunication contractual services, as well as extensive infrastructure. ▪️SiS Distribution (Thailand) Plc is a company selling IT goods to entrepreneurs. The company distributes technology products to over 100 of the world’s leading manufacturers, with the purpose of being the pioneer in integrating technology to help users and organisations increase efficiency. The company also offers goods and services to over 7,000 business owners. ▪️Ananda Development Plc specialises in property development and project management. The company is engaged in the development of condominiums in Bangkok and its surrounding areas, primarily around railway mass-transit hubs. Ananda has continued to develop its brand and its unique Urban Living Solutions with a distinctive, modern style that is designed to meet the expectation of Gen C.
▪️TPCX Co Ltd invests in startups, digital assets, crypto mining, decentralised finance, non-fungible tokens and metaverse. It also focuses on marketing and trading advisory with the intention of becoming a one-stop service agency to fulfil the demands of the business in the digital world. ▪️Inspex is a company focused on blockchain and smart contract security with a team of founders who have prior expertise working in security fields. Smart Contract Audit Service is one of Inspex’s well-known services, which is provided to many platforms on varied networks, including Alpaca Finance on BNB Smart Chain and Fantom Opera, GuildFi on Ethereum, Saros Finance on Solana, Thorus on Avalanche, and Yuemmai on Bitkub Chain. ▪️Diamon Finance is a company that specialises in managing and trading on blockchain and provides decentralised financial services and ecosystems. More than half of the initial list of Node Validators are yet to be revealed. The initial list shows this is a major move due to the credibility of each Node Validator’s hold. These companies are leading players in their respective industries, each having a vast customer base and partnering organisations, and will play a vital role in pushing forward Bitkub Chain’s technology in the future, including game, NFTs, and so on. On March 18, Bitkub Group signed a memorandum of organisation with The Monk Studio, the creator of world-class animation and game assets. Sakolkorn Sakavee, the chairman of Bitkub Group, posted a message on his channel, asking his followers; “If Bitkub were to have its own Metaverse, what would the Bitkub Metaverse look like? What benefits would it offer to Bitkub, to the community, and to the country? Therefore, the first problem we’d like to solve is to push Bitkub Metaverse to stimulate the change of every ecosystem of Bitkub and Bitkub Chain from Web 2.0 to Web 3.0”. “Try to imagine that you own an NFT on Bitkub Chain. Normally you would keep it on Bitkub Next, but after Bitkub Metaverse is launched, you might be able to build your own NFT Gallery, on your virtual land or house,” Sakolkorn said. “If you are partnering Bitkub, normally you can open your own store on Bitkub’s NFT store or bitkubnft.com, but if it were Bitkub Metaverse, you can build your store as a landmark on Bitkub NFT Square where everyone can participate in buying and selling freely.” He said any partners who are interested can build their own building in order to house their community. There will be lands of Bitkub Metaverse that everyone can buy and own to customise them to suit their needs. All of these run and interconnect with other projects on Bitkub Chain. Bittoon’s NFT, or accessories from Morning Moon Village game, can run on Bitkub Metaverse, he added. “There are many other features, including meeting room, party room, event, concert, and many more,” Sakolkorn added.
Jirayut Srupsrisopa, the founder and group CEO of Bitkub Capital Group Holdings, shared his opinion on “How would Metaverse change business and finance in the next three years?” during a “Money Matters” live session with Paul Pattarapon Sinlapajan. “After Covid-19, it is clear that the digital economy has been growing exponentially. What will be next for the whole world is that the country must invest more in the digital economy. A digital infrastructure will be vital to support Thailand to be a leader in the Web 3.0 economy — we failed in Web 1.0 and 2.0. “Many times, opportunities were wasted due to the government being unable to understand the technology, policies were created to control technology instead of supporting their development, resulting in Thailand being the user of technology instead of being the provider. “The government’s support can play an important role in supporting the young generation to start their startups domestically, otherwise they would leave for other countries. “I believe the ability and skills of Thais are second to none. Take NFT art creators, for example. Some Thai artists can make millions by minting their works into NFT and selling it on global platforms. There are also many Thai developers who understand and are passionate about DApps and De-Fi as well. “Not only has Bitkub Chain been built to be the blockchain infrastructure of the country, there is also Bitkub Ventures, one of the subsidiaries within the Bitkub Group, which will financially support Thai startups with innovative minds and aim to create more opportunities for the country.” Joining as a Node Validator on the Bitkub Chain of 21 leading enterprises is a milestone in business and technology due to the massive, dependable and varied businesses with an immense customer base, resulting in more confidence and possibility in blockchain technology. Bitkub Group believes that in the future, there will be more widespread acceptance and mass adoption. For instance, the development of Bitkub Metaverse will create another platform that provides new business prospects and also establishes a strong digital economy to benefit the country’s next generation. An official partnership press conference will be held on March 29 at the Conrad Hotel, Wireless Road, Bangkok. Those interested in following the conference can visit Bitkub Chain Facebook, or www.bitkubchain.com
A surge in demand for smart devices, automobiles and other products requiring chips has caused manufacturing delays and shutdowns. Reports of buyers waiting as long as 20 to 52 weeks for different types of semiconductors have ultimately resulted in plummeting revenue globally to the tune of hundreds of billions of dollars.
Geopolitical risks have also played a key part, especially when the Trump administration began regulating the sale of semiconductors to Chinese firms, and they later began stockpiling chips essential to 5G smartphones and other products.
Subsequently, US companies were cut off from chips made by China’s Semiconductor Manufacturing International Corporation after it was blacklisted by the US government.
In moves to alleviate the problem, manufacturers of automobiles and medical devices are now in talks with the Biden administration to subsidise new US semiconductor manufacturing capacity.
Though the world’s largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), has increased its capital spending budget to US$28 billion, it will still need at least five years to build a new semiconductor fabrication plant.
All these factors have led to the world’s ongoing semiconductor shortage.
According to Deloitte, many kinds of chips are also expected to be in short supply throughout 2022, with some component lead times pushing into 2023. However, it will be less severe than in 2021 and will not affect all chips.
The Semiconductor Industry Association reported that in 2020, global semiconductor sales rose 6.6 per cent to $440 billion, even though global GDP contracted 3.5 per cent. This size and value imply the role that semiconductors play in global products and operations, or the economy in general, are important to leaders across industries.
Semiconductors may contribute to only a small percentage, but they power trillions of dollars of goods and processes. Semiconductor demand is also heavily driven by digital transformation and further accelerated by the pandemic.
For instance, chip demand for both devices and data centres soared in 2020 and 2021. In early 2021, the pandemic caused PC purchases to shoot up by more than 50 per cent year over year, while chip sales increased by 30 per cent for cloud computing data centres.
In the automotive industry, the average car in 2010 contained $300 worth of microchips. This will likely rise to more than $500 in 2022, totalling over $60 billion for 2022. Still, the early 2021’s supply chain issues have illustrated that a lack of critical chips could result in a $61 billion shortfall in global automotive sales this year.
Semiconductor situation in Thailand
As an export hub for semiconductor parts, the industry seems promising as a result of rising global demand. In the first nine months of 2021, Thailand’s export of electronic parts grew 8.2 per cent year over year. The electronic parts industry in Thailand is mainly manufactured for export, totalling 80 per cent of total local production, with midstream products such as integrated circuits, semiconductors, and printed circuit boards.
SCB EIC also predicted that the export of Thai electronic parts would grow approximately 7 per cent year over year, backed by growing demand, an increasingly digitalised economy and the work from the home trend.
In the longer term, Thailand’s electronic parts might play a higher role downstream, such as in automotive, healthcare and electronic appliances, which would be both an opportunity and challenge for entrepreneurs for research and development amid the fast-paced changing market.
Semiconductor shortages have also impacted Thailand’s downstream production, especially the automotive industry. The pandemic’s new wave in 2021 had further contributed to already increasing labour shortages and halted manufacturing productions for cars and parts, particularly in the second and third quarters.
Toyota had ceased production in Thailand in July 2021, while AutoAlliance, the Ford and Mazda manufacturer, had shut its production for two weeks during June to July 2021.
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