_Technology Exports Drive Thailand’s Manufacturing Recovery in 2026

Technology Exports Drive Thailand's Manufacturing Recovery as Electronics Account for 40% of Investment Value

 Knight Frank Thailand's latest Thailand Industrial Market Overview H1 2026 report reveals that Thailand's manufacturing sector showed clear signs of recovery in early 2026, supported by strong private investment and robust growth in technology exports. Electronics, computer components, and telecommunications equipment emerged as the key drivers, while the composition of foreign direct investment (FDI) became more balanced, with manufacturing and supply chain-related sectors regaining prominence after investment in 2025 was heavily concentrated in large-scale digital infrastructure projects.

Thailand's economy expanded by 2.8% year-on-year in the first quarter of 2026, up from 2.5% in the previous quarter. Private investment increased by 10.1%, marking the strongest growth in 14 quarters, driven primarily by machinery and equipment investment. This reflects continued business confidence in expanding production capacity, particularly in export-oriented industries.

Technology Exports Record Strongest Growth in 17 Quarters

Exports remained a key engine of economic growth, rising 17.8% year-on-year to USD 95.1 billion in the first quarter of 2026, accelerating from 9.4% in Q4 2025 and marking the strongest growth in 17 quarters.

The expansion was largely driven by robust global demand for technology products. Exports of computer parts and accessories increased by 45.4%, telecommunications equipment surged by 140.1%, and electrical appliances rose by 19.6%, reflecting broad-based growth across Thailand's technology manufacturing sector.

The report also noted that a more favourable trade environment supported Thailand's exports to the United States. Following the implementation of Section 122, Thailand's effective U.S. import tariff rate declined to 5.3%, contributing to a 41.8% year-on-year increase in exports to the U.S.

Products exempted under Section 122 accounted for 61.2% of Thailand's exports to the United States. In March 2026, exports within these exempted categories expanded by 64.4%, led by digital processing units (+247%), telecommunications equipment (+87.3%), and printed circuit boards (PCB) (+297.8%).

Manufacturing Activity Continues to Improve

The recovery in exports was reflected in Thailand's manufacturing sector. The Manufacturing Production Index (MPI) averaged 97.4 in Q1 2026, up from 95.7 in the same period last year, while manufacturing output expanded by 0.9%, improving from 0.4% in the previous quarter.

Growth was evident across export-oriented industries, mixed-demand industries, and domestic-oriented sectors. Technology-related manufacturing performed particularly well, with production of electronic components and boards increasing by 12.1%, while computers and peripheral equipment expanded by 27.8%.

Capacity utilisation also improved, rising from 57.5% in the previous quarter to 61.3%, in line with stronger machinery investment and increased production to meet growing overseas demand, particularly in high-technology industries.

Marcus Burtenshaw, Partner – Head of Industry Strategy & Solutions, Knight Frank Thailand, commented: "Thailand's manufacturing recovery in early 2026 has been supported by strong global demand for technology products, particularly electronics, computer components, and telecommunications equipment. At the same time, the composition of investment has become more balanced, with manufacturing and supply chain-related sectors regaining importance after investment in 2025 was concentrated in large-scale digital infrastructure projects."

Electronics Remain the Largest Investment Sector

Thailand approved 435 foreign investment projects in the first quarter of 2026, down from 511 projects in the same period last year, while total investment value eased slightly to THB 157.9 billion, compared with THB 162.5 billion a year earlier.

According to the report, the moderation reflects a normalisation following exceptionally strong inflows in 2025 rather than weakening investor confidence. Investment remained concentrated in electrical appliances and electronics, followed by digital, automotive, machinery, automation, logistics, and high-value services.

The electronics sector remained the largest recipient of investment, attracting THB 84.6 billion, representing approximately 40% of total approved investment. Growth was supported by investment in flexible printed circuit boards (FPCB), printed circuit boards (PCB), and related electronic components. 

The logistics sector also gained greater prominence, supported by improving trade flows and rising demand for warehousing and distribution facilities linked to export-oriented electronics and automotive production.

Overall, Thailand's investment profile became more balanced in 2026, with manufacturing and supply chain-related sectors regaining relative importance after investment in 2025 was concentrated in large-scale digital infrastructure projects.

Key Investors Strengthen Different Segments of the Technology Industry 

By source country, Singapore remained Thailand's largest foreign investor, accounting for 57% of total approved investment value, up from 42% a year earlier. Investment was driven by three large-scale data centre projects worth THB 45.3 billion, alongside continued investment in advanced electronics, PCB manufacturing, and GPU-related production.

China accounted for 12% of total investment value, or THB 24.4 billion, with investment concentrated in high-density interconnect (HDI) printed circuit boards and related electronic components.

Japan contributed 10%, or THB 20.6 billion, focusing on upstream PCB materials such as copper clad laminate (CCL), flexible copper clad laminate (FCCL), prepreg, and passive electronic components. 

These investment patterns demonstrate that foreign investment in early 2026 extended across digital infrastructure, PCB manufacturing, electronic components, and upstream materials supporting technology manufacturing.

EEC Remains Thailand's Primary Industrial Base

Knight Frank Thailand's industrial market data show that the Eastern Economic Corridor (EEC) continues to serve as Thailand's principal industrial hub, accounting for 123,478 rai, or 64.6% of the country's total serviced industrial land supply.

Rayong represented the largest share at 38.8%, followed by Chonburi at 20.0% and Chachoengsao at 5.7%. New industrial land supply in the first half of 2026 continued to be concentrated in Rayong and Chonburi.

Marcus added: "Electronics, digital infrastructure, and advanced manufacturing will continue to be key sectors supporting Thailand's industrial activity and investment. As competition for investment intensifies, countries will increasingly be judged not only by their ability to attract individual manufacturing projects, but by their capacity to support the growth of the entire industrial supply chain. The presence of manufacturers across multiple supply chain tiers, together with reliable infrastructure and utilities, will be essential to strengthening Thailand's long-term competitiveness."

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