On July 28, 2026, the World Semiconductor Trade Statistics (WSTS) released its latest forecast that the global semiconductor market will reach $650 billion in 2026, a 12% year-on-year increase, driven mainly by the explosive growth in demand for artificial intelligence (AI) chips, continued deployment of 5G infrastructure, and deepening automotive electronics. This data marks the official entry of the global chip market into an upcycle after inventory adjustments in 2025. At the same time, data from the Thailand Board of Investment (BOI) shows that in the first half of 2026, semiconductor industry investment applications in Thailand increased 45% year-on-year to 80 billion baht (approximately 16 billion yuan), a record high for the same period. The combination of these two positive news items has once again made "why invest in chips" a focus for investors.
Long-term Logic of Chip Investment: Tech Core & Domestic Substitution
Chips are the cornerstone of modern technology, from smartphones to cloud computing, from autonomous driving to the Internet of Things, almost all digital scenarios rely on semiconductors. Currently, global tech competition is increasingly focusing on chip self-sufficiency, and countries are introducing supportive policies. For example, the US "Chips and Science Act" continues to allocate funds, the EU "Chips Act" aims for a 20% global market share by 2030, while China accelerates domestic substitution in mature process nodes. This policy-driven trend provides long-term growth momentum for the semiconductor industry.
In Southeast Asia, Thailand, with its stable political environment, favorable investment policies, and well-established electronics manufacturing base, is becoming an important destination for semiconductor supply chain relocation. The BOI Secretary-General said in an interview: "Thailand not only has traditional advantages in automotive electronics and hard disk manufacturing, but also has formed a cluster effect in packaging, testing, and power semiconductors. In the first half of 2026, investment applications from wafer fabs and packaging/testing plants from China, Japan, and the US increased substantially, covering multiple links from design to manufacturing." This trend aligns with the global demand for supply chain diversification, injecting strong momentum into Thailand's semiconductor industry.
AI Drives Upgrading of Demand Structure, Thailand's Industry Benefits
In the WSTS forecast, AI chips are the biggest growth engine. In 2026, the global AI chip market is expected to reach $150 billion, up 25% year-on-year, with GPUs, NPUs, and memory-computing integrated chips in short supply. With exponential growth in demand for large model training and inference, data centers' demand for high-performance computing chips and advanced memory continues to expand.
Although Thailand has not yet laid out advanced process foundry, it has carved a niche in AI chip packaging and testing. Global leading packaging and testing companies such as ASE and Powertech Technology have factories in Thailand, providing advanced packaging services for customers like NVIDIA and AMD. Additionally, local Thai semiconductor design companies like Hana Microelectronics are actively entering AI-related sensor and power management chip fields. This strategy of "participating in a huge industrial chain and focusing on high-value-added links" gives Thai semiconductor stocks unique investment value.
Valuation and Cycle: An Opportune Time for Positioning
From a cyclical perspective, the semiconductor industry has typical three-year cycle characteristics. From 2023 to 2025, affected by global inflation, weak demand, and high inventories, the industry underwent a deep adjustment, with the SET Semiconductor Index falling 15% at one point in 2025. Entering 2026, with inventory depletion and AI demand explosion, sector valuations have recovered significantly. As of July 30, 2026, the average P/E ratio of the SET semiconductor sector was 18 times, below the historical average of 22 times, and the median dividend yield reached 2.5%, in a reasonably low range.
In addition, the cash flow stability of Thai semiconductor stocks is better than other sectors. According to Q2 2026 financial reports, total free cash flow of SET semiconductor stocks increased 30% year-on-year, and the dividend payout ratio is generally above 40%. Investing in chip stocks not only allows sharing in industry growth dividends but also provides stable cash returns, especially suitable for long-term investors.
Investment Strategy: Focus on Three Main Lines
Given the current market environment, investors can position in the Thai semiconductor sector through the following three main lines:
1. Segment Leaders: Wafer Foundry & Packaging/Testing
Focus on wafer foundry companies with capacity in Thailand (e.g., Silicon Craft Technology, stock code SICT) and packaging/testing leaders (e.g., Hana Microelectronics). These companies benefit from AI chip and automotive chip demand, with order visibility extending to 2027.
2. High-Dividend Defensive Picks: Power Semiconductors & Distributors
Power semiconductors such as IGBT and SiC devices have stable demand in new energy vehicles and industrial sectors. Thai companies like SVI Public have high dividend yields, suitable for conservative investors.
3. ETF Diversification: Semiconductor ETF Thai Stocks
For investors looking to diversify risk, semiconductor-related ETF products in the Thai market, such as THAI SEMI ETF (fictional code), whose constituents cover major SET semiconductor sector companies, with low fees and good liquidity, are worth noting.
Risk Warning and Outlook
Despite the optimistic outlook, investors still need to be wary of the following risks: first, global economic recovery falling short of expectations could lead to demand slowdown; second, changes in Thailand's political situation could affect foreign investor confidence; third, advanced process technology bottlenecks where Thailand's local design capabilities need improvement. However, in the long run, the chip industry as the core driver of technological innovation, its investment value cannot be ignored. In 2026, amid a new upcycle in global semiconductors, Thailand, with its geographical location, policies, and industrial chain advantages, is expected to become a golden track for semiconductor investment in the Asia-Pacific region.
In summary, chip investment is not only about technology following the trend, but also a wise choice to share the dividends of industrial upgrading. At the current juncture, the three factors of reasonable valuation, policy support, and demand explosion resonate, making it an opportune time to position in Thai semiconductor stocks.
