Cambodia’s gradual shift to medium- and high-tech manufacturing

 

Khmer Times, Opinion, 29 June 2026 (Link)

For decades, external observers viewed Cambodia through a predictable economic lens: a low-cost hub heavily reliant on the garments, footwear, and travel goods (GFT) sector. However, a structural shift has quietly accelerated. Moving beyond basic light manufacturing, Cambodia is positioning itself as a key strategic node for medium- and high-technology industries within the Southeast Asian supply chain.

Precision component manufacturing: Adapting beyond the ‘Plus-One’ crisis

The initial pivot into medium-technology manufacturing was modelled around a “Thailand Plus One” strategy, where global automotive and electronics giants sought to buffer their operations in Thailand by offloading labor-intensive component segments to Cambodia.

As an early anchor in the Royal Group Phnom Penh Special Economic Zone (SEZ), Japan’s Minebea pioneered high-precision machining in Cambodia by steadily moving from basic assembly to the manufacturing of advanced micro-motors, LED backlights and complex electronic components, effectively proving that Cambodia’s young workforce could adapt to tight technical tolerances.

In tandem, Japanese automotive giant Denso identified the Kingdom as a strategic manufacturing hub. Denso executives have praised the Cambodian workforce for its perseverance, teamwork and unique patience required in handling equipment-intensive vehicle and motorcycle components like sensors, oil coolers and magnetos.

Faced with an unstable land route to Bangkok, manufacturing anchors like Minebea and Denso have had to urgently re-engineer their logistics. Rather than relying on a land corridor, companies have bypassed the land border. They have redirected cargo towards maritime shipping via the Sihanoukville Autonomous Port (PAS) and utilised emergency air charters. This crisis has forced Cambodia to prove it can sustain high-tech production even when physically isolated from its immediate neighbour.

Automobile assembly sector: Driving full-scale localisation

Preparing the landscape for Cambodia’s semiconductor sector

 

Khmer Times, Opinion, 15 June 2026 (Link)

Cambodia does not have a policy for semiconductors. This article is to share the perspectives from a foundational study that the General Secretariat of the Committee for Economic and Financial Policy conducted and published in September 2024.

Entitled the “Study on the Identification of Strategic Industries and their Promotion through Special Economic Zones,” the research identified semiconductors as one of the future strategic industries. The paper is available only in Khmer.

Consultations were conducted in January and February 2024 with industry players in Vietnam and Thailand regarding the preparatory landscape for the sector.

In Thailand, the Working Group met with the Federation of Thai Industries and the Thailand Printed Circuit Association.

Thailand is a major electronics hub. Between 2021 and 2023, the country brought in a massive 132.1 billion baht ($3.7 billion) in printed circuit board (PCB) investments from tech companies from China – including Hong Kong and Taiwan – Japan and Germany. Because of this big footprint, Thailand handles 5% of the entire global market for PCBs, exporting up to $1.6 billion a year, a figure projected to surge up to 15% (roughly $8 billion) per year in the near future.

But when the team asked the big question: “Is Thailand ready for a semiconductor industry?” – the answer was not an immediate yes or no.

In general, it is understood that the PCB industry is one of the first step towards building up a semiconductor ecosystem. Despite sitting on a multi-billion-dollar PCB industry, Thai industrial players were still not immediately-enthusiastic for this high-tech industry because this industry is no longer just a regular business; it is highly strategic and politically sensitive.

Semiconductors have become matters of national security. Giant semiconductor companies will not risk investing billions in advanced factories unless they have absolute confidence that global political tensions or trade wars won’t suddenly shut down their production lines or block their markets.

Thailand’s lesson is clear: building the early-stage ecosystem is only half the battle; navigating global politics is the other.