International Production Networks in Hard Disk Drive Industry in Thailand

Authors

  • อาชนัน เกาะไพบูลย์ Faculty of Economics, Thammasat University

Keywords:

International Production Networking, Hard Disk Drive, Industrial Cluster, Thai Manufacturing, Multinational Enterprises

Abstract

The paper probes the nature of international production networking (IPNs) of hard disk drive using Thailand as a case study. The research methodology is based on interview evidence of samples purposively selected in order to reveal how firms make use of IPNs. The key finding is that Thailand is well integrated into the global production networks of the multinational enterprises (MNEs). Starting with assembling task for further process, the affiliates in Thailand gradually acquired more technological capability over time and reached a process engineering stage in which the affiliates are capable of developing basic and detailed designs for production processes. At this developmental stage, industrial clustering starts as there is a need for intensive cooperation between HDD makers and suppliers to create effective coordination and to achieve ‘virtual integration of the entire system’. Our findings suggest that industrial clustering does not necessarily rule out the possibility of firms to source their input internationally. In fact, they coexist, i.e. industrial clustering occurs in the first layer of
production network where HDD makers and Tier-1 suppliers work together to avoid any coordination failure. When parts are less customized, as found in the second layer, Tier-1 suppliers internationally source their intermediates and benefit from the existing dispersion of resource endowments around the globe. The key policy inference is that industrial clustering is not a synonym of complete localization. Local content would increase as a consequence of industrial clustering but how much local content would achieve depends entirely on supply-side capability.

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63. อาชนัน เกาะไพบูลย์ (2551) ปรากฏการณ์แบ่งแยกขั้นตอนการผลิตสินค้า: แนวโน้ม รูปแบบและ นัยเชิงนโยบายต่อภาคอุตสาหกรรมไทย (รายงานความก้าวหน้าครั้งที่1) งานวิจัยเสนอต่อสำนักงานสนับสนุนงานวิจัย, กรุงเทพฯ

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Published

2018-07-31

How to Cite

เกาะไพบูลย์ อ. (2018). International Production Networks in Hard Disk Drive Industry in Thailand. Thailand and The World Economy, 28(3), 1–54. Retrieved from https://so05.tci-thaijo.org/index.php/TER/article/view/137370