The government has revealed that Japanese companies in Thailand are entering a new cycle of production upgrades. A survey found that 59 percent plan to replace machinery, while the remainder have plans to improve efficiency, invest in digital technology, automation systems, and energy-saving technologies. This is seen as an opportunity for Thai entrepreneurs to advance into becoming suppliers of high-value-added goods and services.
Today (17 August 2026), Ms. Lalida Phertwiwattana, Deputy Spokesperson of the Prime Minister's Office, disclosed that the government places great importance on retaining existing investment bases alongside attracting new investment. Discussions held on 13 August 2026 between the Board of Investment (BOI), the Japan External Trade Organization (JETRO), and the Japanese Chamber of Commerce, Bangkok (JCC) reflected a key trend: the Japanese business base in Thailand is entering a cycle of production upgrades, with emphasis on machinery replacement, efficiency improvement, the use of digital technology and automation systems, and greater energy reduction. The Deputy Spokesperson of the Prime Minister's Office stated that from 2021 through the first half of 2026, Japanese companies submitted a total of 1,380 investment promotion applications in Thailand, valued at more than 396,000 million baht, reflecting Japan's role as one of Thailand's key investors. She noted that this figure represents the cumulative value of investment promotion applications over approximately five and a half years, and is not a single new lump-sum investment.
Meanwhile, the economic trend survey of Japanese companies in Thailand for the first half of 2026, to which a total of 504 companies responded, found the following regarding the question on details of 2026 investment plans, answered by 432 companies: 59 percent, or 256 companies, plan to replace existing machinery with new equipment; 31 percent, or 132 companies, plan to improve production efficiency; and 22 percent, or 96 companies, plan to invest in Digital Transformation.
"These figures do not mean that Japanese companies have stopped building or expanding new investments. What is clearly visible, however, is that the most frequently chosen activity is machinery replacement and upgrading the efficiency of existing production bases. This reflects a shift in the industrial sector's agenda — from simply expanding production capacity to achieving higher-efficiency production, greater use of technology, energy savings, and long-term competitiveness," Ms. Lalida said.
This direction aligns with the BOI's Smart and Sustainable Industry upgrade measures. From 2023 through the first half of 2026, companies with Japanese shareholders have submitted more than 400 applications for promotion under these measures, with an investment value of over 55,000 million baht, covering machinery upgrades, energy saving, reduction of environmental impact, as well as the adoption of digital technology, automation systems, and robotics in production.
The Deputy Spokesperson of the Prime Minister's Office said that these changes represent an opportunity for Thai entrepreneurs, because upgrading existing factories does not only generate demand for new machinery, but also extends to replacement parts, control systems, automation systems, industrial software, maintenance, as well as energy-saving technology and services.
"As Japanese factories in Thailand enter a cycle of machinery replacement and greater adoption of automation, digital, and energy-saving technologies, this is the opportunity for Thai entrepreneurs to move from being general parts manufacturers to becoming suppliers of goods, technology, and services with higher added value — provided they can develop their quality, standards, punctuality, and ability to integrate with the production systems of their Japanese buyers," Ms. Lalida said.
BOI will work closely with JETRO, the Japanese Chamber of Commerce Bangkok, and the Japanese business sector to support the upgrading of existing business bases toward higher-value-added activities, alongside workforce development, access to clean energy, and the creation of a business environment conducive to investment. The aim is to ensure that Japanese investment not only brings in capital, but also continuously helps elevate technology and opens opportunities for Thai entrepreneurs to play a greater role in higher-value supply chains.
