On July 28, 2026, the Thailand Board of Investment (BOI) officially announced that global foundry leader TSMC and Thailand's homegrown electronic manufacturing services (EMS) giant SVI Public Company Limited have reached a cooperation agreement to build an advanced semiconductor packaging and testing factory in Rayong province, within the Eastern Economic Corridor (EEC). The total investment is approximately 300 billion baht (about US$8.6 billion), with production expected to begin by the end of 2027, primarily serving packaging needs for AI chips, automotive electronics, and high-performance computing (HPC). This move marks a further upgrade of Thailand's position in the global semiconductor supply chain, extending from traditional assembly manufacturing to high-value-added packaging technology.
1. Project Overview: Technology and Capacity Layout
According to the BOI statement, the new packaging plant will adopt TSMC's 3D Fabric advanced packaging technology, including Integrated Fan-Out (InFO) and Chip-on-Wafer-on-Substrate (CoWoS) processes, with a planned monthly capacity equivalent to 50,000 12-inch wafers. The plant occupies approximately 500,000 square meters in an industrial park within the core EEC area, enjoying investment privileges under the Thai government's "super cluster" scheme, including up to 13 years of corporate income tax exemption, duty-free import of equipment, and convenience for foreign expert work permits.
Partner SVI, one of Thailand's largest EMS enterprises, has long provided assembly services for automotive, communications, and consumer electronics. This cooperation with TSMC will help SVI transition to technology-intensive upstream segments. SVI's CEO stated at the ceremony: "Advanced packaging is the final critical step in chip manufacturing, directly determining the chip's final performance. Through this collaboration, we hope to cultivate local Thai packaging engineering talent and inject new momentum into Thailand's semiconductor ecosystem."
2. Industry Background: Southeast Asian Semiconductor Investment Boom Continues
In recent years, the global semiconductor industry has undergone profound regional restructuring. Amid US-China tech competition and supply chain security considerations, major chipmakers have been diversifying production to Southeast Asia, India, and other regions. Leveraging its solid electronics manufacturing base, well-developed infrastructure, and proactive policy support, Thailand has become a key destination for packaging and testing. According to SEMI, Thailand's share of global semiconductor packaging and testing output was approximately 6% in 2025, projected to rise to 10% by 2028.
TSMC chose Thailand over Vietnam or Malaysia mainly due to the cluster effect of the EEC corridor. Currently, the EEC hosts over 300 electronics and semiconductor-related companies, including major packaging and testing houses like ASE and JCET, as well as numerous PCB and material suppliers. The Thai government also plans to establish a "National Semiconductor Institute" by 2027, focusing on packaging, testing, and materials R&D to further strengthen localized technical reserves.
Notably, advanced packaging has become a key performance enhancement beyond traditional process scaling. Particularly, AI chips' surging demand for high-bandwidth memory (HBM) and heterogeneous integration has led to shortages of CoWoS and other packaging technologies. TSMC's move in Thailand aims to relieve near-capacity pressure at its Taiwan plants while serving the growing demand for automotive chips and AI inference chips in Southeast Asia.
3. Impact on SET Market: Related Stocks Worth Watching
Following the announcement, the semiconductor and electronics sectors on the SET showed significant movement. SVI (ticker: SVI) rose 4.8% that day to close at 23.5 baht, a six-month high. Additionally, CCET, which supplies components for semiconductor equipment, and GC Group (GC), which manufactures specialty gases, both gained over 2%. Analysts believe that with the TSMC project advancing, Thailand's local supply chain will see a wave of order growth, particularly in high-purity chemicals, test fixtures, and automation equipment.
Beyond direct beneficiaries in EMS and materials, real estate investment trusts (REITs) and industrial park developers have also attracted attention. Rising demand for industrial land in the EEC region is expected to benefit WHA Group (WHA) and AMATA Group (AMATA), which own industrial park assets in Rayong. However, investors should also be mindful of risks such as long project cycles, technology transfer uncertainties, and global semiconductor cycle fluctuations.
4. Expert Views: Thailand's Semiconductor Ecosystem Still Needs Chain Completion
Professor Thitinan Pongsudhirak from the Faculty of Economics at the University of the Thai Chamber of Commerce noted in an interview: "The landing of an advanced packaging plant is a significant step for Thailand's semiconductor industry, but there is still a long way to go before becoming a true 'semiconductor powerhouse.' We need breakthroughs in upstream segments like chip design and wafer fabrication, not just packaging and testing. Under the current global geopolitical tensions, Thailand enjoys the dividend of being a 'neutral country,' but to continuously attract high-end investment, it must also address engineer shortages and high electricity costs."
BOI Secretary-General Narit Therdsteerasukdi stated at a press conference that the government plans to introduce special incentives for wafer fabrication by 2027 and expand technical cooperation with Japan and Europe. He revealed that ongoing talks with at least three international semiconductor companies regarding the possibility of setting up wafer fabs in Thailand are underway.
5. Future Outlook: Packaging First, Fabrication Follows
From the global semiconductor industry trend, advanced packaging is becoming a competitive focus. According to Yole Group, the advanced packaging market is expected to grow at a compound annual growth rate of 12% from 2025 to 2030, far higher than traditional packaging. With this collaboration with TSMC, Thailand is poised to take a leading position in Southeast Asia's packaging and testing segment. However, in the long run, whether it can attract front-end wafer fabrication will determine Thailand's true integration into the core semiconductor supply chain.
For SET investors, semiconductor-themed investment opportunities are gradually shifting from concept hype to performance realization. It is recommended to focus on local suppliers directly linked to the TSMC project and EMS companies with technology upgrade potential. At the same time, monitor changes in global AI computing demand and trade policy risks, and manage positions accordingly.
In summary, the arrival of TSMC's advanced packaging project in Thailand's EEC semiconductor cluster is an important milestone for the upgrade of Southeast Asia's semiconductor industry. It not only brings massive investment and technology transfer to Thailand but also injects a new growth narrative into the local capital market. In the coming years, as the project commences production and the ecosystem matures, Thailand's semiconductor industry is expected to enter a golden development period.
