Arrival of Japanese investment has flooded into Thailand since the 1960s. In Thailand, the country carrying out most of the investment is Japan. Thus Thailand has become an important investment area for Japanese companies. The study found that a regional characteristic of Japanese-affiliated companies in Thailand are concentrated in and around the capital known as Bangkok. Even the Thai government actively promoted investment in areas outside of Bangkok. Many Japanese companies chose locations in the Bangkok-wide area because of the access to the harbor and the relationship with business partners and associated firms. But specific places of accumulation differ by the dominated industry type; i.e., automotive industry, the electric/electronics industry, and the electronic component/electronic device industry. Such regional lumps are referred to as specific regional industrial agglomerations or industrial clusters. Japanese firms are increasingly transferring the development function, and thus strengthening local unification supervising function for ASEAN. The results from this study suggest that in the Thai industrial cluster, there is a possibility to stimulate innovation with competition coexisting with cooperation. Furthermore, in the presence of intense competition there are cost reductions as well as.