Kiatnakin Phatra Securities (KKPS) notes that Thailand, alongside South Korea, Taiwan, and Malaysia, is well-positioned for AI hardware exports, a sector including enterprise hard disk drives, servers, and outsourced semiconductor assembly.

In the first five months of 2026, Thai exports rose 17% year-on-year, with electronics up 50.6% and shipments to the U.S. increasing 40.3%. Despite this surge, Thailand's trade deficit widened to $25.2 billion, and manufacturing output declined 0.8%. Imports grew 35.6%, with electronic parts more than doubling, indicating significant transshipment and imported inputs.

KKPS observes a K-shaped pattern in Thai manufacturing. Growth is concentrated in sectors like HDDs and food and beverages (about 35% of manufacturing), while others, including autos and petrochemicals (65%), continue to contract. Auto production is down 15% year-on-year, and legacy industries face pressure from Chinese overcapacity.

The AI hardware export boom, while positive for tech, is insufficient to counteract broader weaknesses, particularly in autos and legacy sectors, restraining Thailand's overall economic outlook and putting pressure on production and the current account.