Thailand / Vietnam Tech Tour: Top Six takeaways from factory visits across PCB, Networking, and AI server supply chain

Research evidence excerpt

Thailand / Vietnam Tech Tour: Top Six takeaways from factory visits across PCB, Networking, and AI server supply chain

isited highlighted that mainland China remains the

most efficient place for manufacturing given close proximity to supply chain and long

experience. The labour costs in Thailand / Vietnam is lower compared to mainland

China; however, the production efficiency is also lower. Besides this, if raw material (e.g.

CCL) needs to ship from mainland China, the tariff and transportation costs could drive

up the costs by 15-20%. Nevertheless, companies also mentioned customers are willing

to pay even though the costs can be up to 20% more expensive compared to that in

mainland China, and companies are adopting more automated production to reduce the

reliance on workers and to explore potential to drive further productivity. Generative AI,

AR glasses, and digitalization are also used in factories, supporting training and

production lines duplication, which are especially helpful when expanding capacity

overseas.

6. AI investments continue: ODMs we visited in Thailand / Vietnam remain positive on

the AI capex upcycle, based on customers’ request on capacity with willingness to

prepay or subsidize the equipment to secure the capacity, expanding customer base on

AI infrastructure and edge AI devices, and growing AI applications and token

consumption. Companies we visited mentioned that AI capex from global leading CSPs

(cloud services providers) remains strong, along with growing demand from model

developers / NeoClouds, and could further expand to government (Sovereign AI), and

enterprises, offering long-term sustainability on AI infrastructure demand. Companies

also see global leading brand customers working on innovative edge AI devices,