Supply Chain Diversification Hits the PCB Industry
On May 26, 2026, Chinese PCB manufacturer Changzhou Aohong Electronics (605058.SH) officially inaugurated its first overseas manufacturing subsidiary in Thailand — joining a growing wave of Chinese electronics firms establishing Southeast Asian production capacity.
This move represents the broader "China+1" strategy now sweeping through the printed circuit board industry, driven by tariffs, customer requirements, and geopolitical risk management.
Why Thailand?
Thailand has emerged as a preferred destination for PCB manufacturing expansion:
- Established electronics ecosystem (hard disk drives, automotive parts already manufactured there)
- Free trade agreements with ASEAN, Japan, and the EU
- Lower tariff exposure compared to China for US/EU exports
- Competitive labor costs with available technical workforce
- Government incentives through the Board of Investment (BOI)
Other Chinese PCB makers (like DSBJ) and Taiwanese firms (Unimicron, operational since 2005) already operate Thai facilities.
The China+1 Reality for PCB Buyers
Several forces are driving geographic diversification:
- US-China tariffs: PCBs from China face 25%+ tariffs when exported to the US
- Customer mandates: Major OEMs require at least one non-China PCB source in their AVL
- Supply chain shocks: The 2026 Gulf conflict caused 40% PCB price spikes in China, validating diversification needs
- EU regulations: Upcoming supply chain due diligence laws favor diverse, auditable supply chains
What This Means for Hardware Startups
For hardware companies sourcing PCBs:
- Same manufacturer quality — established processes transferred to new sites
- Tariff advantages — Thailand-origin PCBs face lower/zero tariffs in many markets
- Risk distribution — not all production in one geographic location
- Lead time consideration — new facilities need 12-18 months for full process qualification
The expansion of the global PCB manufacturing footprint is good news for hardware engineers who've been dealing with supply constraints. More capacity, more geographic options, and more competitive pricing as facilities ramp up.
The Bigger Picture
Aohong's Thailand move isn't a relocation — it's an addition. The company maintains primary manufacturing in Changzhou, China, while offering customers geographic optionality. This dual-source model is becoming standard practice across the industry.
For hardware teams planning production runs, the key takeaway: engage with Southeast Asian facilities during their ramp-up phase for favorable pricing and priority allocation.
Source: IC&PCB Union, May 26, 2026
Related:
Top comments (0)