Thailand's outdated tech sector struggles to compete with rivals

Next month the last batch of televisions will roll off the production line at LG Electronics'plant in Thailand's Rayong province.

The company said on Tuesday that it was moving production 1,500 kilometres northeast to the Vietnamese coastal city of Hai Phong, where labour costs are cheaper and China-based suppliers closer.

The move is part of a downward trend for Thailand's once-booming electronics industry, which is struggling to find a foothold in the global supply chain for modern technology like smartphones. In January, the country's manufacturing index fell for the 22nd consecutive month, with production of goods like televisions and radios down 38 per cent year on year.

The decline is raising concerns that Thailand's economic slowdown is not a temporary problem caused by its political upheaval but a structural one caused by the manufacturing industry's failure to adapt and the increasing attractiveness of its lower-cost neighbours.

"It's time for products with high technology but nobody has invested in them here," said Visnu Limwibul, chairman of the Thai Electrical, Electronics, Telecommunication and Allied Industries Club.

Electronics is Thailand's largest export sector and is crucial for a country where goods sold overseas are equal to over 60 per cent of its economic output.