BANGKOK/TAIPEI – Just outside the Bangpoo Industrial Estate near the Thai capital of Bangkok, more than 1,000 Taiwanese gathered in February for a Lunar New Year feast for the Year of the Dragon.
But it is not just in the “Land of Smiles”. Countries across South-east Asia have seen a surge in investment from Taiwan in recent years as uncertainties over the United States-China trade war, increased labour costs in China, and frosty cross-strait relations have pushed Taiwanese companies to continue diversifying away from China.
At Thailand’s Bangpoo Industrial Estate, a 10-minute drive from the association, is Taiwanese automotive electronics solutions company E-lead Electronic, whose clients include Ford, General Motors, Toyota and Chrysler. E-lead’s first Thai factory, which was established in 2006, overtook its Chinese counterpart in 2023 to become the firm’s largest production base.
Mr Chen said: “We’ve had a presence in Thailand for years, so we could respond to our global customers’ changing needs very quickly. It made sense for us to expand our operations here. As a business, we always have to follow the customer.”While E-lead has had a presence in Thailand for 18 years, a host of other Taiwanese tech and electronics firms have established operations in and around Bangkok more recently.
In 1994, then Taiwan President Lee Teng-hui’s introduction of the Go South policy helped bring more businesses to South-east Asia. That year, Taiwanese foreign direct investment into Asean countries more than doubled to US$4.98 billion, from US$1.76 billion the year before. But South-east Asia would come into focus once more in 2016 after then Taiwan President Tsai Ing-wen of the independence-leaning Democratic Progressive Party introduced the New Southbound Policy.
“All of our major banks are in Singapore because it has a reputation for being reliable and politically stable,” she told The Straits Times. “Ultra-rich Taiwanese have also turned to Singapore to open family offices.”The Republic’s excellent infrastructure and competitive workforce also make it attractive for semiconductor manufacturing, Ms Hsu added.
“Singapore is UMC’s speciality technology hub, spearheading R&D for various advanced speciality process technologies. UMC’s growth strategy focuses on markets served by speciality technologies, making Singapore a very important hub for the company,” said a company spokesperson. However, as a spokesman for the Taiwan Printed Circuit Association said, “the production transfer this time around is different from the cost-driven one”.
In 2023, Taiwanese investments in Vietnam amounted to around US$1 billion, more than double the US$450 million in 2016, according to MOEA statistics. In November 2021, Chinese subsidiaries of Taiwanese conglomerate Far Eastern Group were slapped with a hefty fine of 474 million yuan , a move that observers linked to the group’s financial contributions to the DPP’s campaign during past legislative elections. Shortly after, the group’s chairman Douglas Hsu issued a statement rejecting Taiwanese independence.
Workers inside the Thailand factory of Taiwanese automotive electronics solutions company E-lead. ST PHOTO: YIP WAI YEE “Businessmen like us steer clear of any discussions of politics. If the Chinese authorities here do not like what we say or do, they could pressure the Thai government to make things difficult for us,” he added.Moving operations to some South-east Asian countries also means facing other challenges not faced in China, such as language barriers.
Besides interpreters, a fierce battle has also emerged throughout South-east Asia for highly skilled tech workers, given the number of tech firms that has converged in the region – not just from Taiwan, but also from its competitors from Japan, South Korea, the US and even China, which are also taking the “China plus one” approach.
“There is a competition for talent. No matter how much you offer your workers, there will always be another company that is able to offer more money,” said Mr Vincent Chang, the firm’s managing director for Asia and intercontinental regions. Economic ties between Beijing and Taipei are expected to endure in the coming years “even as anxieties over the Taiwan Strait intensify”, he added.